He made a good call on rates. But, an investor in an SPX index fund made over 30% more than a 10-year Treasury holder during the same 30-year bond-bull period.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
WSD:
I hold bonds, but not Treasuries, I use them to smooth out returns and volatility. That said, there's just no denying that over substantial time periods equities outperform bonds and have always done so. Now, if you wish to choose one narrow ten-year period, where the market has suffered once-in-70-years crisis and hysteria and use that as a typical bond-performance barometer, then, go ahead.
The charts showing 100-year historical bond yields makes it pretty clear that the bond halcyon days are in the rearview mirror. Even if rates didn't reverse themselves for several years, who wants to net <2% yields awaiting an inevitable reversal?
Frankly, I don't care what happened in the last ten years or last thirty, only where things look like they're positioned now. If something should scare people, it's that 100-year yield chart.
The "Death of Equities?" John Authers and Kate Burgess explore the end of more than a half-century "passion for equities," as institutions shed stock exposure for fixed income. The authors suggest stocks' relative cheapness is more about low bond yields, and unless said yields are going to go negative, any tailwind to equity prices from fixed income is about used up. (see also) [View news story]
re Tack's previous post:
(SA fouling up the link...Sorry; cannot transpose correctly)
Enter following three lines in browser on one line with no spaces and after http:
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
WSD:
Here's the link, again. No idea why incorrectly transposed in SA:
(SA fouling up the link...Sorry; cannot transpose correctly)
Enter following three lines in browser on one line with no spaces and after http:
What data refutes claim? I know it's just hard for you gloomers to imagine that equities outperformed bonds during bonds' biggest glory days, but it's true.
This chart should give any Treasury-bond investor great pause. If it doesn't, then there's not much that can be said:
You keep sticking with your 1.7% Treasuries. I'll stick with my 10% yielding portfolio of common, preferred and corporate bonds, and we can compare notes in coming years. My positions aren't a short-term trade, either, and I've been doing this for a very long time.
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
DU:
I'm always long. I don't short, ever. Instead, I change bond/preferred/common allocations and occasionally raise cash balances.
Presently, about 80% securities, 20% cash. Securities spread 48% common, 21% preferred, 31% debt. Present portfolio yield is 10.17%.
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
DU:
The U.S. is the world's third-largest exporter. Obviously, lots of folks buy lots of stuff.
The "Death of Equities?" John Authers and Kate Burgess explore the end of more than a half-century "passion for equities," as institutions shed stock exposure for fixed income. The authors suggest stocks' relative cheapness is more about low bond yields, and unless said yields are going to go negative, any tailwind to equity prices from fixed income is about used up. (see also) [View news story]
Now, does anybody think that an investment in Treasuries looks appealing at current yields?
When rates begin to rise --and, they will rise again, just as sure as the sun comes up each day -- then, we're going to see a dramatic erosion in bond principal values, and all those folks who thought they were "safe" by buying Treasuries with nearly no yield are going to abandon them. And, lots of that money will find its way back to equities, which have been stagnant and mostly eschewed, as Treasuries have soared in the last few years, not the subject of any "passion," as imagined by the authors. During this time, however, corporate performance has continued to increase, yet prices have mostly crabbed sideways, making for ever lower P/E's.
Bonds have only looked excessively appealing because of fear and misconceived safety. Nobody can maintain or build a future existence on 2% yields over any length of time. And, when underlying bond prices start to erode, indicating that bonds have risk, too, then, people will realize it's better to have greater returns, if there's risk exposure on both sides of the fence, which there is and always has been.
To get an idea how substantially better the returns in equities are versus bonds, one only need consult the following chart:
It's interesting to note that, even while bonds have enjoyed the last 30-year bull market, equities during that time enjoyed returns that were over 30% higher than bonds.
Following years of prodigious spending, health insurers, doctors and hospital are making efforts to halve the growth in the U.S.'s $2.7T healthcare bill to bring it more in line with inflation. One problem, though, is that the more tests and procedures doctors and hospitals do, the more money they get. [View news story]
Can't have open season by ambulance-chasing tort lawyers and expect medical providers to skimp on tests. It's legal defense, not medicine.
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
It's always important to get inaccurate information out faster. :-)
Peter Lynch had the theory Mondays are typically bad for stocks because the weekend just gives the worrywarts time to worry. Eddy Elfenbein puts the idea to the test and finds the S&P is off 8.23% for all the combined Mondays since April 15, 2011. Tuesdays: The S&P has gained 20.05%. [View news story]
In the 24/7 Internet age, there's even more mischief and hysteria that can be generated over a weekend.
During the period 1980-1985 the dollar rose dramatically against world currencies, yet the stock market doubled in value. It's not an immutable law that the dollar and equity markets are related inversely.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
WSD:
You may wish to examine the following chart of historical data, which despite the performance of bonds during the last ten years, conclusively demonstrates that equities outperform bonds handily, over time, including during the 30-year bond bull since 1980, during which time equities have still outperformed by over 30%, even with all the recent travails.
Of course, bond markets are much larger than equity markets, but size has no bearing on performance. Given that data clearly shows that equities outperform bonds, over time, and that bonds are at all-time low yields (high prices), which class of securities do you think will outperform going forward?
For anybody not making a short-term trade, the answer should be rather apparent.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Shilling has written negative articles for many years. His tune never changes. Of course, all bears hit paydirt eventually. Just not now.
Is It Time To Buy A House? [View article]
He made a good call on rates. But, an investor in an SPX index fund made over 30% more than a 10-year Treasury holder during the same 30-year bond-bull period.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
I hold bonds, but not Treasuries, I use them to smooth out returns and volatility. That said, there's just no denying that over substantial time periods equities outperform bonds and have always done so. Now, if you wish to choose one narrow ten-year period, where the market has suffered once-in-70-years crisis and hysteria and use that as a typical bond-performance barometer, then, go ahead.
The charts showing 100-year historical bond yields makes it pretty clear that the bond halcyon days are in the rearview mirror. Even if rates didn't reverse themselves for several years, who wants to net <2% yields awaiting an inevitable reversal?
Frankly, I don't care what happened in the last ten years or last thirty, only where things look like they're positioned now. If something should scare people, it's that 100-year yield chart.
The "Death of Equities?" John Authers and Kate Burgess explore the end of more than a half-century "passion for equities," as institutions shed stock exposure for fixed income. The authors suggest stocks' relative cheapness is more about low bond yields, and unless said yields are going to go negative, any tailwind to equity prices from fixed income is about used up. (see also) [View news story]
(SA fouling up the link...Sorry; cannot transpose correctly)
Enter following three lines in browser on one line with no spaces and after http:
pages.stern.nyu.edu/
~adamodar/New_Home_Page/
datafile/histret.html
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Here's the link, again. No idea why incorrectly transposed in SA:
(SA fouling up the link...Sorry; cannot transpose correctly)
Enter following three lines in browser on one line with no spaces and after http:
pages.stern.nyu.edu/
~adamodar/New_Home_Page/
datafile/histret.html
What data refutes claim? I know it's just hard for you gloomers to imagine that equities outperformed bonds during bonds' biggest glory days, but it's true.
This chart should give any Treasury-bond investor great pause. If it doesn't, then there's not much that can be said:
http://bit.ly/Lu9Umg
You keep sticking with your 1.7% Treasuries. I'll stick with my 10% yielding portfolio of common, preferred and corporate bonds, and we can compare notes in coming years. My positions aren't a short-term trade, either, and I've been doing this for a very long time.
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
I'm always long. I don't short, ever. Instead, I change bond/preferred/common allocations and occasionally raise cash balances.
Presently, about 80% securities, 20% cash. Securities spread 48% common, 21% preferred, 31% debt. Present portfolio yield is 10.17%.
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
The U.S. is the world's third-largest exporter. Obviously, lots of folks buy lots of stuff.
The "Death of Equities?" John Authers and Kate Burgess explore the end of more than a half-century "passion for equities," as institutions shed stock exposure for fixed income. The authors suggest stocks' relative cheapness is more about low bond yields, and unless said yields are going to go negative, any tailwind to equity prices from fixed income is about used up. (see also) [View news story]
Take a look at the following chart: http://bit.ly/KtEwnz
Now, does anybody think that an investment in Treasuries looks appealing at current yields?
When rates begin to rise --and, they will rise again, just as sure as the sun comes up each day -- then, we're going to see a dramatic erosion in bond principal values, and all those folks who thought they were "safe" by buying Treasuries with nearly no yield are going to abandon them. And, lots of that money will find its way back to equities, which have been stagnant and mostly eschewed, as Treasuries have soared in the last few years, not the subject of any "passion," as imagined by the authors. During this time, however, corporate performance has continued to increase, yet prices have mostly crabbed sideways, making for ever lower P/E's.
Bonds have only looked excessively appealing because of fear and misconceived safety. Nobody can maintain or build a future existence on 2% yields over any length of time. And, when underlying bond prices start to erode, indicating that bonds have risk, too, then, people will realize it's better to have greater returns, if there's risk exposure on both sides of the fence, which there is and always has been.
To get an idea how substantially better the returns in equities are versus bonds, one only need consult the following chart:
http://bit.ly/w4jRpw~adamodar/New_Home_Pag...
It's interesting to note that, even while bonds have enjoyed the last 30-year bull market, equities during that time enjoyed returns that were over 30% higher than bonds.
Following years of prodigious spending, health insurers, doctors and hospital are making efforts to halve the growth in the U.S.'s $2.7T healthcare bill to bring it more in line with inflation. One problem, though, is that the more tests and procedures doctors and hospitals do, the more money they get. [View news story]
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
Market Pessimism Is Overdone [View article]
It will occur the moment that U.S. rates begin to rise. Equities and the dollar will rise in tandem.
Peter Lynch had the theory Mondays are typically bad for stocks because the weekend just gives the worrywarts time to worry. Eddy Elfenbein puts the idea to the test and finds the S&P is off 8.23% for all the combined Mondays since April 15, 2011. Tuesdays: The S&P has gained 20.05%. [View news story]
Let's Stop All The Pretending [View article]
http://bit.ly/w4jRpw~adamodar/New_Home_Pag...
Market Pessimism Is Overdone [View article]
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
You may wish to examine the following chart of historical data, which despite the performance of bonds during the last ten years, conclusively demonstrates that equities outperform bonds handily, over time, including during the 30-year bond bull since 1980, during which time equities have still outperformed by over 30%, even with all the recent travails.
http://bit.lyw4jRpw~adamodar/New_Ho...
Of course, bond markets are much larger than equity markets, but size has no bearing on performance. Given that data clearly shows that equities outperform bonds, over time, and that bonds are at all-time low yields (high prices), which class of securities do you think will outperform going forward?
For anybody not making a short-term trade, the answer should be rather apparent.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]