Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (133570)	11/8/2001 5:24:13 PM
From: sun-tzu	Read Replies (2) \| Respond to of 436258

Mark, IMHO Pimco is one of the smartest, and perhaps the most difficult to read of, all the money corp's. They have an enviable understanding of risk allocation. My read, for all it is worth, is this: I do not feel they believe an economic recovery is likely by Q2. I do think that their model calls for an economic turnaround in the 2nd half of 2002. I personally agree with that scenario because it will coincide with the beginning of the Presidential reelection campaign. Whether that turnaround sticks or not is an entirely different discussion. I think PIMCO is making an early, predictable and risk aversive move into an asset class with the best and most guaranteed yield. Classic behavior of a quality bond group. They'll bail when the reallocation process drives the price up of corporates. In the meantime, they'll take the higher yield and cash in when the yields get hit. I also think that while PIMCO may be estimating a turnaround in late 2002, they also feel the equity landscape will be dramatically different by that time. Multiples need to return to historic norms and they know that. Quality bond groups like PIMCO do not go against a regression to the mean.