How Much Has the Fed Lost? We spent much of yesterday looking at the potential for 3% on the 10-year Treasury and the Fed’s treasury position. For those of you who asked the Fed had lost $105 billion on the $1.6 trillion on the bonds they owned in early March. Since the 10 -ear was… Read More
Stocks Won’t Be Enough
by • August 19, 2013
This post appeared originally on Forbes.com. Heard this one from your broker? “Sure, there are problems out there, but the real question is whether you think the market will be higher or lower three years from now.” Most of us are optimists, so we buy. OK, but the critical issue is really: how much higher?… Read More
Holding Bonds To Balance Stocks? There Are Better Ways
by • July 8, 2013
This post originally appeared on Forbes.com. Before you dump bonds, remember why you have them.” So says the mainstream financial press, echoing countless advisors. Their big point is that investors shouldn’t get too spooked by the recent carnage because bonds have, for decades, acted a ballast against stock volatility, and that sort of insurance will… Read More
Liquidity Detox: Prepare For The Shakes
by • June 18, 2013
This article originally appeared on forbes.com. Volatility is back, and unpacking for a long stay. June will set a 2013 record for days with 100-point swings, and the Vix is headed north. But the real story is in bonds, where total returns for the year — interest income plus or minus price movement– actually went… Read More
And the Mighty Arms of Atlas Hold the Heavens from the Earth
by • June 10, 2013
Jeremy Hill of TF Market Advisors puts out the excellent weekly Macro Monitor newsletter. Check out this week’s edition below: Roughly 4.4 million Americans were described as long term unemployed in Friday’s jobs report. That number seems intuitively important in the context of current monetary policy. We believe the fear of structural long term unemployment has… Read More
The Hedge-Fund Investment Puzzle
by • June 5, 2013
The following originally appeared in the The Wall Street Journal: If hedge funds are as bad as the headlines would have us believe, why do sophisticated institutions keep investing in them? Anyone glimpsing headlines lately knows that hedge funds are accused of causing the Cooper Union college endowment to fail, are underperforming and overcharging, and… Read More
Safe Fixed Income Returns, Even As Bonds Tumble
by • June 3, 2013
This post originally appeared on Forbes.com. Bond investors are faced with a rude development: total returns – that is, the combination of income and price movement – are now negative for the year (junk bonds aside). Who even remembers the last time that was true? Perhaps we’re not really seeing the end of a 30-year… Read More
Defense Wins Investing Championships, Too
by • May 27, 2013
The following post originally appeared on Forbes.com. Every serious sports fan knows that “defense wins championships. The Ravens and the Tide are famous for it. In the NBA, all three of the top scoring teams were easily eliminated early in the playoffs by more defensively-minded squads. Great pitching beats great hitting. You knew that, but… Read More
It Depends Upon the Data
by • May 29, 2013
Bob Eisenbeis over at Cumberland Advisors shared the following insights about the Federal Open Market Committee: Two keystones to current FOMC policy are transparency and effective communications. Both have taken a hit last week. Chairman Bernanke’s testimony before Congress did little to clarify how long the FOMC will pursue accommodative policy, what will cause it… Read More
MLPs: High After-Tax Income… But Avoid A Common Mistake
by • May 20, 2013
MLPs– Master Limited Partnerships– are back in style. Born in the 80s to incent investment in domestic energy infrastructure, Congress showered them with impressive tax benefits. Like their contemporaries, acid washed jeans and Swatches, they were forgotten for a while, but are du jour again…. Read More