Gyroscopic Investing

http://www.cnbc.com/id/45474748

I'm confident PP might see better returns but still likely in for a disappointment in the coming years..

He now says UK gilts and US treasuries are good bets. So 4.5% yields a few months back made buying them only a trap for stupid suckers but 3.5% yields now are fine .

Bill Gross should talk less.

The noises that come from his mouth are becoming more and more dissonant to me.

Wow... and it's more like 2.9%, stone.

Simply amazing.

Sometimes I feel like maybe... just maybe... I'm in an echochamber and that maybe a lot of the financial media is saying things that I am choosing not to listen to out of arrogance, while investing in a pipe-dream strategy that will be a real dud over the next decade, and the laughs of my friends are legit.

Then I read things like this, and feel warm and cozy in this board again.

Keep stuff like this coming from time-to-time.

Active managers continue to impress with their ability to completely get things wrong but rake in millions for doing so.

I suppose it is his fiduciary duty to talk his book. It just makes it all the more important to realize that that is all he is doing.

Fiduciary duty... key word, duty.

Bill Gross is exhibit #1 on why you should stay out of the prediction business. 

I didn't realize it was spelled like that.

You learn something stinky every day.

This year approximately 77% of all investment advisors have not broke above the S&P500. Most are very smart savvy people just like Bill Gross. The only hope for the average investor is to do it themselves according to a proven backtested formula like Harry Browne portfolio  or slight modifications and rebalance the first day of each month.  If I still can't beat the S&P I can still claim that I approximated billion dollar money managers like Bill Gross ( he's not doing very well ) but with far more control and far less cost.

Bobby wrote: This year approximately 77% of all investment advisors have not broke above the S&P500. Most are very smart savvy people just like Bill Gross. The only hope for the average investor is to do it themselves according to a proven backtested formula like Harry Browne portfolio  or slight modifications and rebalance the first day of each month.  If I still can't beat the S&P I can still claim that I approximated billion dollar money managers like Bill Gross ( he's not doing very well ) but with far more control and far less cost.

Welcome to the forum Bobby.  As you read more you will probably see that rebalancing the PP every month is not an optimal approach (rebalancing tends to occur more like one time every year or two), though when it comes time to rebalance it probably wouldn't hurt to wait until the first of the month to do so.  OTOH, since a PP rebalancing event could just as easily involve buying stocks as it could involve selling stocks, maybe the first of the month strategy wouldn't be worth the trouble, since it is presumably not equally beneficial to both buy or sell stocks on the first of the month.

"Smart savvy" people doesn't imply competence.  The problem with Wall Street, besides being salesmen for the most part, is that they all think alike, generally have all the same restrictions and incentives, participate in all of the same fads, and do all of this all at the same time.

I get really tired of the "average investor" devaluing themselves by believing the nonsense that they're somehow "stupid and nonsavvy" compared to the so-called investment professionals.  That is part of the shtick to get their hands on your money.  But, chicken and egg...

MG

Bobby wrote: This year approximately 77% of all investment advisors have not broke above the S&P500. Most are very smart savvy people just like Bill Gross. The only hope for the average investor is to do it themselves according to a proven backtested formula like Harry Browne portfolio  or slight modifications and rebalance the first day of each month.  If I still can't beat the S&P I can still claim that I approximated billion dollar money managers like Bill Gross ( he's not doing very well ) but with far more control and far less cost.

MediumTex wrote: Bill Gross should talk less.

The noises that come from his mouth are becoming more and more dissonant to me.

I second that. The latest example is his infamous bet against the Treasuries in the early 2011 - as a result Pimco Total Return missed the nice run of LTTs over the year.

People like Gross are what I now call money smart.  Their money makes them smart, and since they have so much, why everyone agrees.  Paul Allen is money smart when running his basketball team, he does not need a GM, for he makes all the genius moves, just like Gross. 

jswinner wrote: People like Gross are what I now call money smart.  Their money makes them smart, and since they have so much, why everyone agrees.  Paul Allen is money smart when running his basketball team, he does not need a GM, for he makes all the genius moves, just like Gross. 

Gross's calls haven't been all that impressive lately.  He totally missed the amazing gains in the 30 year bond earlier this year.

MT,

Bonds don't have gains... they either post losses if rates rise, or are simply an unattractive contract to receive a scarily-low rate of interest over a 30-year span.

Or at least that's what common investing rhetoric would have you believe.

One thing that I also find interesting is that not only are 30 year treasuries default-risk free, but when you analyze the market there's simply nothing like them... I don't know the statistics, but to protect themselves, homeowners, corporations and municipalities want callable bonds, and I believe  very few bonds in these areas are non-callable.

This almost creates an environment where the re is a "drought" in the markets for long-term annuity-type contracts that aren't geared towards an insurance provider collecting lots of fees, and marketable to sell at any time.  Combine that with its non-corellation with stocks (aka, "good volatility") and it makes it hard to want to invest in any other kind of bond.