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Gundlach’s Forecast for 2014
by Robert Huebscher,
In his 30-year career as a fixed-income manager, Jeffrey Gundlach has never seen a forecast as solidified across every asset class as is the consensus for 2014. Investors expect stocks to outperform bonds, gold to be a "loser," commodity prices to head lower, domestic markets to outperform non-U.S. markets and the dollar to be strong, according to Gundlach. But many of those views are wrong, he believes.
The Verdict on Unconstrained Bond Funds
by Robert Huebscher,
If you are unwilling or unable to forecast rate movements, then delegating fixed-income management - through an "unconstrained" bond fund - offers the hope of strong performance regardless of market environments. But the data show that over the last three years, unconstrained funds on average did not meet that goal.
Gundlach - Dont Plan on Tapering
by Robert Huebscher,
Investors face many concerns as the new year approaches, but a recurrence of Mays "taper tantrum" should not be high on their lists, according to DoubleLines Jeffrey Gundlach. With the majority of Fed governors staking a dovish position, "quantitative stimulus is likely to remain with us longer than people think," Gundlach said.
Why a Shrinking Deficit Means Lower Earnings
by Robert Huebscher,
Proponents of tax increases or government spending cutbacks will have to reckon with something they never anticipated: depressed corporate earnings that will reduce equity prices. As our government deficit shrinks - whether through sequestration or by any other means - so will corporate profits, the primary driver of equity prices.
Research from Yale on Commodities
by Robert Huebscher,
Many would consider the practice of placing assets in a commodity fund to be speculation rather than investing. That perception was amplified by a recent Bloomberg article, which reported the dismal performance of many managed-futures funds and commodity-trading advisors (CTAs). Contrary to that image, Geert Rouwenhorst, a Yale University professor, claims he has found a way to construct a commodity-based fund that earns a significant premium over inflation.
Reflections on a Week in Cuba
by Robert Huebscher,
My recent one-week visit to Cuba revealed why our relationship with this island country ? less than 100 miles off the coast of Florida ? has been problematic for the U.S. for the last half-century. Once the Castro brothers are gone, the government of Cuba may change in dramatic ways. But such a transition would have to be accompanied by a change in U.S. policy to Cuba. Pictures from my trip are also provided.
Can Financial Engineering Cure Cancer?
by Robert Huebscher,
Securitization and the collateralized obligations it produced led to the financial crisis and the near-collapse of the financial markets. But financial engineering’s bad reputation could turn around. Andrew Lo, a professor at the MIT Sloan School of Management and director of its Laboratory for Financial Engineering, thinks financial engineering can cure cancer.
Bond Legend Dan Fuss on Rising Rates
by Robert Huebscher,
Having just celebrated his 80th birthday, Dan Fuss can claim a unique achievement ? his tenure in the fixed income markets has spanned a full market cycle, from the great bear market that began in the early 1950s through the equally great bull market that commenced in 1981. Fuss said today’s environment most closely resembles what he confronted in the late 1950s, when long-term rates were 3% and beginning their march upwards.
The Futility of the Endowment Model
by Robert Huebscher,
In the past two decades, the so-called endowment model has been adopted by hundreds of endowments, foundations and advisors ? particularly those serving ultra-high-net-worth clients. By aggressively allocating to illiquid alternative asset classes, those investors hoped to duplicate the results of Yale and other top-tier institutions. New research exposes the futility of those efforts.
Charles de Vaulx: “We Have Never Been as Cautiously Positioned”
by Robert Huebscher,
Charles de Vaulx is the chief investment officer and a portfolio manager at International Value Advisers. In this interview, he discusses his outlook for the market and the economy, and why his fund has never been as cautiously positioned as it is today.
The Hidden Risk in Gold
by Robert Huebscher,
Since their introduction a little over a decade ago, gold-backed exchange-traded funds (ETFs) have accumulated more than $500 billion in assets. Investors’ most common rationale for owning gold is that it acts as a hedge against financial instability or a sudden shock to the markets, such as the 9/11 attacks. But what if the flow of assets into gold ETFs plays a greater role in the price of gold than do investors’ fears of instability? Is gold the hedge investors believe it to be?
GMO’s Montier on Why to Hold Cash
by Robert Huebscher,
Central bank policies have distorted markets to such a degree that investors are devoid of any buy-and-hold asset classes, according to James Montier. But according to Richard Bernstein, the flood of liquidity unleashed through quantitative easing (QE) now offers investors compelling opportunities.
Gundlach ? Dont Sell Your Bonds
by Robert Huebscher,
Dont sell your bonds just yet, according to Jeffrey Gundlach. Global economic growth is slowing, he said, and the U.S. will be competing for a larger slice of a shrinking worldwide pie. A weaker economy dims the prospects for higher interest rates. The benchmark 10-year Treasury yield ? currently 2.08% ? will be 1.70% by the end of the year, according to Gundlach, providing profits for holders of long-term bonds.
Vincent Reinhart on Debt and Growth in the U.S. and Japan
by Robert Huebscher,
High debt levels translate to slower growth, according to Vincent Reinhart. That conclusion will be disheartening to those who jumped on the errors several University of Massachusetts scholars found last month in Carmen Reinhart (Vincent’s wife) and Ken Rogoff’s research. But Vincent Reinhart is the author, along with his wife and Rogoff, of a study published in 2012 that documented the degree to which high debt-to-GDP levels correlate with slower economic growth in developed countries.
David Rosenberg ? My Love Affair with Bonds is Over
by Robert Huebscher,
The chorus of rate-spike-fearing inflationists has a new member. David Rosenberg, a stalwart advocate of fixed-income investing for the last quarter century, publicly declared on May 3 that his “love affair with the bond market has come to an end.” Prepare for a redux of 1970s stagflation, he said, and he advised investors how to construct portfolios to prepare for that scenario.
Is Kyle Bass Wrong About Japan?
by Robert Huebscher,
Its standard practice for short sellers to kick dirt on their targets, and Kyle Bass is doing just that by asserting that Japans economy is on the verge of a financial crisis. In a talk on May 3, he said that Japans demise is imminent. So far, though, Bass has been wrong ? and he has his detractors, who are far less certain of Japans destiny.
Mohamed El-Erian: The Three-Speed Global Economy
by Robert Huebscher,
The global economy is operating at three distinct speeds, according to Mohamed El-Erian, and investors need to understand the implications of the divergent paths that key countries are following. Japan and most European countries are going backward, he said, and could continue in that direction for decades. The U.S. is “healing,” but not quickly enough to get to “escape velocity.” Certain emerging markets, meanwhile, are adapting technology and innovation and are growing rapidly.
Nouriel Roubini: Four Reasons Investors Should be Worried
by Robert Huebscher,
Despite a modest recovery from the nadir of the financial crisis, the global economy still faces tail risks, according to Nouriel Roubini. Roubinis forecast is not as gloomy as the one that earned the moniker Doctor Doom, when he correctly predicted the housing market collapse and the ensuing global recession. But, in a talk May 1, he identified todays biggest danger points in Europe, the U.S., China and geopolitics which he said threaten to destabilize the global economy.
The New Challenges to Reinhart and Rogoff
by Robert Huebscher,
Advocates for debt reduction and austerity have had no more authoritative sources than Carmen Reinhart and Ken Rogoff. But last week, these two professors had to defend claims that errors in their research ? ranging from a typo in a spreadsheet to the failure to include data from New Zealand ? invalidated their much-acclaimed findings.
Michael Pettis - Can China Save Itself?
by Robert Huebscher,
Most analysts predict Chinas growth will slow; they disagree only as to the depth and timing of its eventual recession. A rare exception to that group is Michael Pettis. Pettis, who describes himself as a skeptic, believes China can rebalance its economy.
John Hussman ? Why Prospective Returns Are Low
by Robert Huebscher,
Monetary and fiscal policies have driven our economy into an unstable equilibrium, pushing investors into higher-yielding securities, according to John Hussman. But those higher yields are illusory, he said, because corporate profit margins are too high to be sustainable.
How to Invest Like Buffett
by Robert Huebscher,
Listen to Jim Cramer or his cohorts on CNBC and you’ll hear statements like, “Don’t settle for the mediocre returns of a market index!” and “It’s not that hard for investors to pick stocks that will beat the market!” Unless you possess the skills of Warren Buffett, that’s not true. But in the book Think, Act and Invest Like Warren Buffett, Larry Swedroe says you indeed can invest like Buffett ? just not by stock-picking.
Paul Matlack from Delaware Investments on the Direction of the Bond Market
by Robert Huebscher,
Paul Matlack is senior vice president, senior portfolio manager and fixed income strategist for Delaware Investments. His firm oversees $145 billion in fixed-income strategies, and in this interview Matlack discusses his outlook for the economy and the bond market, and how advisors should be positioning client portfolios.
Gundlach: Investors are asking the Wrong Question
by Robert Huebscher,
If you're trying to assess the Federal Reserve's so-called exit strategy from quantitative easing, then you're asking the wrong question, according to Doubleline's Jeffrey Gundlach. Quantitative easing is a permanent policy tool, he said, and investors should be asking what that means for their investment strategy.
What Economists can Learn from Downton Abbey
by Robert Huebscher,
Economists warn that the U.S. economy could be heading toward one of two catastrophes: the two-decade long stagnation that has befallen Japan, or the hyperinflation that struck Zimbabwe and the Weimar Republic. Such cautionary tales alert policymakers to the failed efforts of their predecessors. But the most relevant comparison is rarely cited ? to Great Britain in the 1920s, as depicted in the highly popular PBS series Downton Abbey.
Five Ways to Improve Your Investing Decision Making
by Robert Huebscher,
Successful investing requires a contrarian mindset; anything else is, at best, a recipe for mediocrity. This is especially true for an investment committee, the core of an advisory firm's decision-making process. Five prominent advisors ? Harold Evensky, John Hill, Steve Cassaday, Steve Kaye and Berk Nowak ? are embracing unconventional approaches to ensure that their investment committees operate in the most effective ways possible.
Wally Weitz on Value Investing in the Post-Crisis Era
by Robert Huebscher,
As the president and founder of Weitz Funds, Wally Weitz has spent nearly three decades putting his instinct for opportunity to work for shareholders. Influenced by the value-investing model of Benjamin Graham and Warren Buffett, Wally manages the Partners III Opportunity Fund (WPOPX), which has had an annual return of 10.85%, versus 6.23% for the S&P 500. In this interview, he discusses his investment methodology and how it has evolved since the financial crisis.
Gundlach?s Predictions for 2013
by Robert Huebscher,
Don't expect the low volatility that characterized the capital markets in 2012 to continue. Global economic uncertainty remains, and markets are poised like a 'coiled snake' to reward or penalize investors in certain asset classes, according to Jeffrey Gundlach.
Gundlach's High-Conviction Investment Idea
by Robert Huebscher,
Count Jeffrey Gundlach among those who expect Japan's currency to collapse because it can't service its debt. Japan's challenges may parallel those that the US faces, and Gundlach feels strongly that they have created a compelling investment opportunity.
Jeremy Siegel on 'Dow 15,000'
by Robert Huebscher,
Jeremy Siegel was one of very few individuals to have correctly predicted the strong performance of the equity markets over the last year. The Wharton professor and author of the renowned book, Stocks for the Long Run, forecasts continued strong performance for the year ahead.
Kyle Bass on the Next Big Crisis
by Robert Huebscher,
If economics could be studied in a laboratory, scientists might concoct something like the circumstances now unfolding in Japan ? and policymakers should be paying close attention. According to Kyle Bass, Japan's currency ? and its bond market ? are about to collapse under the weight of the country's unsustainable fiscal deficit.
The Downside to Socially Responsible Investing
by Robert Huebscher,
Who wouldn't want a cleaner environment or a more just society? We can all agree these are worthy goals. But it's an established fact that pursuing them through one's investing is costly; environmental-, social- and governance-based investing (ESG) does fine on a gross basis, but loses money net of fees. Now, a recently published paper argues that that ESG is basically a waste of time.
Lacy Hunt on Our Economic Future
by Robert Huebscher,
Last week I spoke with Lacy Hunt, an unequivocal advocate of deficit reduction. Hunt defended ? as persuasively as few others can ? the need to address our fiscal imbalances. But equally respected economists are advocating for the other extreme, and he shares some common ground with them.
Confronting the Unemployment Crisis
by Robert Huebscher,
Policymakers seeking a path to economic recovery must first answer one crucial question: Is our persistently high unemployment structural or cyclical? If it's cyclical, then monetary and fiscal measures designed to boost consumer spending will restore the US to full employment in due course. But if we face a structural problem, then quick fixes won't work until we correct deeper imbalances that have left 12.5 million Americans without jobs.
Woody Brock on Why to Own Stocks Now
by Robert Huebscher,
Dr. Horace 'Woody' Brock is the founder Strategic Economic Decisions and the author of American Gridlock. In a recent talk, he explained why investors should own stocks - particularly those with stable dividends - and why bonds are very risky in today's environment. This is the transcript; a video of this talk is also available.
Jim Bianco ? Markets Will Benefit From Disastrous Fed Policy
by Robert Huebscher,
The Fed's quantitative easing policy will be 'disastrous,' according to Jim Bianco, but prices for riskier assets will rise over the near term as a result. In remarks last week, Bianco, the head of the Chicago-based economic research firm that bears his name, also gave the US economy a near-failing grade of C-, and warned that inflation will be 'problematic.'
Value Investing in a Macro-Driven Environment
by Robert Huebscher,
The GoodHaven Fund (GOODX) is managed by Larry Pitkowsky and Keith Trauner. For most of the previous decade, Larry and Keith held research, portfolio management, and executive positions with the Fairholme Fund. I spoke with them last week.
Results 501–550
of 769 found.
