Comments on: Bill Gross: Sell equities and buy Treasuries http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html a finance news and opinion site Sun, 21 Mar 2010 15:11:29 +0000 hourly 1 By: Edward Harrisonhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-7730 Edward Harrison Tue, 22 Sep 2009 17:28:57 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-7730 From a retail investor point of view, the investment world is challenging in times like these. Buy and hold is not a good strategy in a bear market environment. I still believe we are in the middle of a secular bear market and that rallies like the one we are now seeing fool people (especially retail investors) into believing otherwise.<br><br>My take on this is the same as the one I had on housing: forget about the pundits and use common sense. If it sounds too good to be true, it probably is. By that I mean we have seen a 60% upside move in shares. Yes, we are well off the all-time highs. But, does it seem logical that this rally should continue after such a remarkable run? Probably not. That would mean taking a more defensive posture to reduce risk due to heightened market uncertainty. <br><br>The example would be house prices circa 2004. Could they continue to rise? yes. And they did for 2 more years. But, is the market you are in and the individual investment you are making a good deal? If you are buying a house at 5 times salary and for a mortgage of 40% greater than the equivalent rent, those signposts should be telling you that investment risk is high. A lot of people ignored this fact at their peril.<br><br>here again the same is true. There are plenty of reasonable assets. But there are many bubbly stocks out there already. In an environment where stocks have already risen 60% it makes sense to me to reduce exposure to riskier assets and go defensive. From a retail investor point of view, the investment world is challenging in times like these. Buy and hold is not a good strategy in a bear market environment. I still believe we are in the middle of a secular bear market and that rallies like the one we are now seeing fool people (especially retail investors) into believing otherwise.

My take on this is the same as the one I had on housing: forget about the pundits and use common sense. If it sounds too good to be true, it probably is. By that I mean we have seen a 60% upside move in shares. Yes, we are well off the all-time highs. But, does it seem logical that this rally should continue after such a remarkable run? Probably not. That would mean taking a more defensive posture to reduce risk due to heightened market uncertainty.

The example would be house prices circa 2004. Could they continue to rise? yes. And they did for 2 more years. But, is the market you are in and the individual investment you are making a good deal? If you are buying a house at 5 times salary and for a mortgage of 40% greater than the equivalent rent, those signposts should be telling you that investment risk is high. A lot of people ignored this fact at their peril.

here again the same is true. There are plenty of reasonable assets. But there are many bubbly stocks out there already. In an environment where stocks have already risen 60% it makes sense to me to reduce exposure to riskier assets and go defensive.

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-7729 Edward Harrison Tue, 22 Sep 2009 17:18:51 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-7729 He was indeed. Any market analyst is bound to talk his own book and we need to be able to discern how much of what they say is for real and how much of it is to promote their own market view. in Gross's case, his view is underpinned by his gigantic bond portfolio. Pimco simply is to large to make market moves quickly enough to profit from individual statements Gross makes. So you have to think he is fully behind these views as his investment positioning attests.<br><br>Gross has been singing the same tune about the new normal - and the resultant government intervention - for some time. Early in the year, he felt it meant MBS would outperform. they did. now, he thinks the rally in riskier assets has been way over the top and he is scaling back accordingly. I share that view. He was indeed. Any market analyst is bound to talk his own book and we need to be able to discern how much of what they say is for real and how much of it is to promote their own market view. in Gross's case, his view is underpinned by his gigantic bond portfolio. Pimco simply is to large to make market moves quickly enough to profit from individual statements Gross makes. So you have to think he is fully behind these views as his investment positioning attests.

Gross has been singing the same tune about the new normal – and the resultant government intervention – for some time. Early in the year, he felt it meant MBS would outperform. they did. now, he thinks the rally in riskier assets has been way over the top and he is scaling back accordingly. I share that view.

]]> By: Bill Gross: sell risky assets and buy Treasuries « naked capitalismhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6524 Bill Gross: sell risky assets and buy Treasuries « naked capitalism Tue, 22 Sep 2009 12:05:26 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6524 [...] Linked here is a video of Gross talking on CNBC along with two other market experts, Bob Doll and Dan Tishman, regarding their view of the economy and financial markets (I am having trouble embedding here so I have to link back to the original post). Gross goes as far as to say point blank that one should sell equities and other riskier assets like high-yield bonds. [...] [...] Linked here is a video of Gross talking on CNBC along with two other market experts, Bob Doll and Dan Tishman, regarding their view of the economy and financial markets (I am having trouble embedding here so I have to link back to the original post). Gross goes as far as to say point blank that one should sell equities and other riskier assets like high-yield bonds. [...]

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6527 Edward Harrison Tue, 22 Sep 2009 11:28:57 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6527 From a retail investor point of view, the investment world is challenging in times like these. Buy and hold is not a good strategy in a bear market environment. I still believe we are in the middle of a secular bear market and that rallies like the one we are now seeing fool people (especially retail investors) into believing otherwise.<br><br>My take on this is the same as the one I had on housing: forget about the pundits and use common sense. If it sounds too good to be true, it probably is. By that I mean we have seen a 60% upside move in shares. Yes, we are well off the all-time highs. But, does it seem logical that this rally should continue after such a remarkable run? Probably not. That would mean taking a more defensive posture to reduce risk due to heightened market uncertainty. <br><br>The example would be house prices circa 2004. Could they continue to rise? yes. And they did for 2 more years. But, is the market you are in and the individual investment you are making a good deal? If you are buying a house at 5 times salary and for a mortgage of 40% greater than the equivalent rent, those signposts should be telling you that investment risk is high. A lot of people ignored this fact at their peril.<br><br>here again the same is true. There are plenty of reasonable assets. But there are many bubbly stocks out there already. In an environment where stocks have already risen 60% it makes sense to me to reduce exposure to riskier assets and go defensive. From a retail investor point of view, the investment world is challenging in times like these. Buy and hold is not a good strategy in a bear market environment. I still believe we are in the middle of a secular bear market and that rallies like the one we are now seeing fool people (especially retail investors) into believing otherwise.

My take on this is the same as the one I had on housing: forget about the pundits and use common sense. If it sounds too good to be true, it probably is. By that I mean we have seen a 60% upside move in shares. Yes, we are well off the all-time highs. But, does it seem logical that this rally should continue after such a remarkable run? Probably not. That would mean taking a more defensive posture to reduce risk due to heightened market uncertainty.

The example would be house prices circa 2004. Could they continue to rise? yes. And they did for 2 more years. But, is the market you are in and the individual investment you are making a good deal? If you are buying a house at 5 times salary and for a mortgage of 40% greater than the equivalent rent, those signposts should be telling you that investment risk is high. A lot of people ignored this fact at their peril.

here again the same is true. There are plenty of reasonable assets. But there are many bubbly stocks out there already. In an environment where stocks have already risen 60% it makes sense to me to reduce exposure to riskier assets and go defensive.

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6526 Edward Harrison Tue, 22 Sep 2009 11:18:51 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6526 He was indeed. Any market analyst is bound to talk his own book and we need to be able to discern how much of what they say is for real and how much of it is to promote their own market view. in Gross's case, his view is underpinned by his gigantic bond portfolio. Pimco simply is to large to make market moves quickly enough to profit from individual statements Gross makes. So you have to think he is fully behind these views as his investment positioning attests.<br><br>Gross has been singing the same tune about the new normal - and the resultant government intervention - for some time. Early in the year, he felt it meant MBS would outperform. they did. now, he thinks the rally in riskier assets has been way over the top and he is scaling back accordingly. I share that view. He was indeed. Any market analyst is bound to talk his own book and we need to be able to discern how much of what they say is for real and how much of it is to promote their own market view. in Gross's case, his view is underpinned by his gigantic bond portfolio. Pimco simply is to large to make market moves quickly enough to profit from individual statements Gross makes. So you have to think he is fully behind these views as his investment positioning attests.

Gross has been singing the same tune about the new normal – and the resultant government intervention – for some time. Early in the year, he felt it meant MBS would outperform. they did. now, he thinks the rally in riskier assets has been way over the top and he is scaling back accordingly. I share that view.

]]> By: Davidhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6521 David Tue, 22 Sep 2009 00:31:34 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6521 Edward....if you don't mind me asking. Whether you listen to Bill Gross, Robert Prechter, Henry Blodget, Noreil Rubini or the myriad number of other pundits all you can come away with is either a mixed bag of self serving platitudes, contradictory analysis or well reasoned opinions that seem to gravitate from one extreme to the other.<br>In your opinion is it possible to discern the truth anymore? I literally mean the truth not the likelihood of a forecast or prediction. Truth that you can use as a foundation to make some reasonable choices and be somewhat assured of a logical outcome?<br>Or is there only hype, misrepresentation, disinformation an un-level and completely compromised playing field where nothing can be known?<br>As Eliot Spitzer recently said "you can't win so don't play" as true as that may be, many of us don't have the luxury of making no choice. And yet, how does one make a choice in a void not of their own making where process, integrity and reason no longer seem to apply.<br>I look forward to your reply if you have some time. Edward….if you don't mind me asking. Whether you listen to Bill Gross, Robert Prechter, Henry Blodget, Noreil Rubini or the myriad number of other pundits all you can come away with is either a mixed bag of self serving platitudes, contradictory analysis or well reasoned opinions that seem to gravitate from one extreme to the other.
In your opinion is it possible to discern the truth anymore? I literally mean the truth not the likelihood of a forecast or prediction. Truth that you can use as a foundation to make some reasonable choices and be somewhat assured of a logical outcome?
Or is there only hype, misrepresentation, disinformation an un-level and completely compromised playing field where nothing can be known?
As Eliot Spitzer recently said “you can't win so don't play” as true as that may be, many of us don't have the luxury of making no choice. And yet, how does one make a choice in a void not of their own making where process, integrity and reason no longer seem to apply.
I look forward to your reply if you have some time.

]]> By: Aki_Izayoihttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6520 Aki_Izayoi Mon, 21 Sep 2009 21:32:09 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6520 Wasn't Gross talking down Treasuries months ago? Wasn't Gross talking down Treasuries months ago?

]]> By: Fredhttp://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6518 Fred Mon, 21 Sep 2009 18:30:15 +0000 http://www.creditwritedowns.com/2009/09/bill-gross-sell-equities-and-buy-treasuries.html#comment-6518 Who is Bill Gross to call anyone "disingenuous." Who is Bill Gross to call anyone “disingenuous.”

]]>