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.

Strategies & Market Trends : Moufassa's Lair -- Ignore unavailable to you. Want to Upgrade?

To: moufassa7 who wrote (2831)	12/14/2001 2:19:10 PM
From: DebtBomb	Respond to of 13660

mouf, that's what I'm thinking. But, which way?? We probably won't know until Monday morning. I'll be cash over the weekend. Lot's of stuff hitting lower B-bands, but does it bounce, or keep on selling?? Anyone have a copy of the Wall Street Journal for Tuesday next week?? Hee hee.

To: moufassa7 who wrote (2831)	12/14/2001 2:38:56 PM
From: DebtBomb	Respond to of 13660

There's some whacky stuff going on and more coming up next week, IMO. Binnie could be gone, Argentina could default, the stimulus pkg. could get scrapped until maybe next year, and I don't even want to think about the other stuff...........

To: moufassa7 who wrote (2831)	12/14/2001 3:06:48 PM
From: Tradelite	Read Replies (1) \| Respond to of 13660

This is interesting. Especially since I've already been doing what this fellow suggests, at least in terms of buying mortgage securities. _____________ PIMCO's Gross says 8 pct bond returns possible in 2002 Friday December 14, 11:32 am Eastern Time NEW YORK, Dec 14 (Reuters) - Bill Gross, widely considered the most powerful U.S. bond mutual fund manager, said bonds in 2002 may outperform stocks for a third straight year, and that bond investors can expect returns of as much as 8 percent. The money manager, who oversees $229 billion as a managing director at PIMCO Investment Management Co. in Newport Beach, California, said that to achieve that 8 percent return, bond investors should be seeking out alternatives to safe, but lower-yielding, U.S. Treasuries. Gross outlined his forecast in his latest monthly report, published Friday and titled ``The Bond Bull Market Is Dead! Long Live The Bond Bull Market!'' He said investors should buy ``spread product'' such as corporate bonds, mortgage securities and emerging market debt, with yields exceeding those on intermediate maturity Treasuries by 2 to 3 percentage points. ``PIMCO intends to buy the spread,'' he said. ``Total returns approaching 8 percent are likely, which in a 1-1/2 percent inflationary environment and a 5 percent stock market world over the long term are attractive returns indeed.'' Gross also runs the $50 billion Pimco Total Return fund. That fund's institutional shares have posted a 7.95 percent annualized return over the last five years, beating 99 percent of its intermediate-term bond fund peers, according to fund tracker Morningstar Inc. The money manager recommended AT&T Corp.'s (NYSE:T - news) new 30-year bonds with a yield of 8 percent, Mexico's 10-year notes with a yield of 8.5 percent, and government-backed Ginnie Mae pass-through certificates yielding 6.5 percent. He said even long-term Treasuries yielding in the ``mid-5's'' have appeal. ``Fears of a bear market in bonds over the next 12 months are exaggerated, to say the least,'' Gross said. ``If inflation comes down and stays down, there seems to be no basis to presume a bear market in bonds absent a crash in the dollar and withdrawal of foreign investment.'' SHIFT TO CORPORATE BONDS Gross has long been a fan of mortgage debt, and has regularly invested in emerging market debt. He had for more than a year, though, been chilly on corporate debt, as the U.S. economy ground into recession. Earlier this autumn, he said corporate debt would likely look attractive by the start of 2002. But he has moved early. The bonds, like most U.S. bonds, have in 2001 enjoyed a second straight year of solidly positive total returns, helped along by 11 Federal Reserve interest rate cuts. Even ``junk'' bonds, which had a terrible year in 2000, are in positive territory. So far this year, Treasuries have returned 6.12 percent, including interest, while investment-grade corporate bonds have returned 9.59 percent, junk bonds 4.37 percent, mortgage securities 7.72 percent, and emerging markets sovereign debt 1.16 percent, according to Merrill Lynch & Co. With yields on many Treasuries now at levels not seen in decades, many Wall Street investment banks are now urging their clients to buy more spread product. This, they say, should help them improve their performance relative to Treasuries as the U.S. economy recovers, even if interest rates rise and their absolute levels of performance suffer. Gross doesn't expect a big backup in rates. He said the Fed has in the past raised rates ``with long lag times following an economic recovery.'' Gross skewered bond investors whom he said are forecasting a rise in the Federal funds rate, now 1.75 percent, to nearly 3.75 percent by the end of 2002. ``That forecast...is an exaggeration almost as bad as my claiming to nearly having played Duke basketball,'' he said.