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Charles
Thank you sma3! We are spending this summer in northwest again. I have no quiet place I can be before noon eastern (9 am here). Library opens at 9am! I've set up a session for Friday, 2 pm eastern ... posted on board. But, if that does not work, just call me at 805 468 9599 ... if I can pick up I will. Hopefully, can pick a day where you can attended from noon on. Very happy to do! c
@BewWP. Yes, this month seems to be painting individual investors into a corner ... become day traders or risk the consequences of catastrophic loss.
Forget that quaint notion of checking your portfolio monthly, quarterly, semi-annually.
Really?
…
Of course, the two 50% drawdowns and the 3 bear markets over this period have helped keep millennials away from investing. I actually think they were finally starting to warm-up to it, until this March's madness.
Yes, exactly. That's why I love looking at rolling returns. You can't decide the year you were born and the 20-year period(s) you were invested. Going back 60 years through February, the S&P 500 delivered anywhere from 5.6% to 18.3% annualized o…
Yeah, I've been thinking same thing. Talk about potential for price dislocation. How does the market know what the true demand is when the Fed/Treasury is buying everything up? Maybe the Fed is just betting that demand and attendant liquidity will r…
Thanks Mark. Yes, I've seen the devastation there too. The Great Liquity Crisis of 2020. Something tells me things are going to change big time in the way CEFs, ETFs, and OEFs are priced. c
Yay! HYD and HYMB also up strong today and closed discounts to VWLAX prices. Maybe too this will help redemptions stop for IOFIX. Maybe it's fed intervening in market in general, offering MF firms interest free cash for redemptions. I don't know. Ma…
Yeah. And if it keeps going up, those of us that track to month-ending data only, there may never have been a bear! (Not my view, just saying.) The daily volatility this month (bond funds included) feels like five years! It is not something longer-t…
Good one MikeM. M* kinda of rubbing investors' noses in it ... "You should have been invested in one of our metal rated funds." And yes, they get to take a bow ... this March I sure wish I had been in PIMIX! But honestly, for the last 3 years, I was…
Good link catch22. I see to the fund has most of its assets in BBB, which I believe is the lowest level of Investment Grade (IG) bonds. The Fed backstop has helped stabilize the IG market, but I fear companies (and their debt) may get downgraded in …
Ha! I used the quote recently.
Just checked AUM ... $1.7B, down from $4.5B. The irony is that today's level is where they were when they told me they were "day to day" on inflows.
I loved these guys, their firm, and their strategy. The AUM growth …
@catch22. I know. Unprecedented really. How could there not be a robust market for TLT? But there wasn't ... until yesterday. Here's illustration ...
https://twitter.com/MstarETFUS/status/1242452746466402305?s=20
I suspect they need to survive redemptions first, then see what’s left. Until the Fed stepped-in yesterday, even highly traded ETFs like TLT and LQD had big discounts between price and NAV, signaling liquidity concerns with IG bonds. There are smart…
OMG. There will be a focus on fixing pricing mechanisms and/or imposing holdings regulations in future with fixed income, but we need to get through this crisis first.
@OJ. I don't know either, but when we get through this crisis, bond oef/etf pricing mechanisms and/or holding regulations will have to be improved. A dream I have.
Thanks for sharing sma3.
The “recent dislocation is one of the most rapid and severe we’ve seen—and this is all with the backdrop that there are no solvency concerns around the mortgage agencies, Fannie Mae and Freddie Mac, in contrast to the exper…
Another 14% down today, which is slightly better than I feared.
@Old_Joe. I agree with you that the topic of liquidity has been written about in our commentary (by Ed) and on the board by many, but I've never seen a fixed-income fund fall so much s…
Beautiful! Yes, I noticed too that RPHIX has not suffered losses like ZEOIX, DODIX, PIMIX. Yes, closer to MINT. A rare bright spot in the fixed income market. (Although RSIIX has not fared particularly well.) Be very curious about his views on liqui…
As corporate debt gets downgraded in days/weeks ahead, fixed income funds/pensions/endowments with mandate to hold only investment quality bonds will be forced to sell, even if the current redemption pressure eases.
Yes, thanks Mark. I share Mr. Barnes view that we will get through this, but after last week, I believe things will get worse first. Not looking forward to the market moves on Monday. And, yes too, I think MBS is on-sale like many assets right now. …
Got it. So in this environment we must all be watching prices daily? I know that is a strategy and certainly works well for Junkster. I understand one reason ETFs started was in response to Black Monday 1987. Maybe some assets (and some types of fun…
@MikeM and @newgirl.
Thinking more about the letter MikeW shared ...
If the sudden drops are caused by forced redemptions, which I fear they are, the situation seems tough.
Forced redemptions mean discounted prices on thinly traded assets, which …
I wholeheartedly agree with Mark. It's amazing how forthcoming fund houses can be when things are going well. The better test is whether they keep communicating when things go wrong. I remember D&C's folks in 2009 were constantly engaged with wo…
How does it end well? We start to see other countries come back online. We start to see leveling off of CV-19 cases. We see less death than feared. We give subsidies, extend loans and restructure debt ... slip payment due dates. Maybe outright forgi…
