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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (2014)	9/7/2002 7:10:28 AM
From: Boca_PETE	Read Replies (2) \| Respond to of 10065

Wally M: RE: ("The market needs to yield close to 3.5 percent before it approaches fair value, and that means Dow 5,000," Gross wrote in his monthly commentary.") Am I missing something? That sounds more like a commercial urging people to buy bonds, rather than a prediction. I did not see where he was forecasting DOW 5000. He only seemed to be stating the conditions necessary to make stocks more attractive than bonds. Implication to me was, until DOW 5000 under the current environment, stocks stink so buy bonds (preferrably through his PIMCO funds). FWIW, P

To: Wally Mastroly who wrote (2014)	2/4/2003 4:16:38 PM
From: Wally Mastroly	Read Replies (3) \| Respond to of 10065

A new "Gross" prediction: Pimco's Gross warns of dire times Bond guru Bill Gross advises investors to prepare for 'anemic' gains amid falling dollar, inflation. February 4, 2003: 9:49 AM EST NEW YORK (Reuters) - A spendthrift United States is losing its "peace dividend" as war and terrorism fears mount, a change that may boost the inflation rate and hurt corporate profits, the U.S. dollar and investor returns, according to Bill Gross, who runs the world's largest bond mutual fund. Gross, who manages the $67.8 billion Pimco Total Return bond fund, said Monday that the United States is entering a "somewhat vicious cycle of policy reversal" that might lead to "anemic" gains for investors. "Many of us will have to adjust, either in the form of higher unemployment, an increased price for imported goods, or heavier indirect taxes in the form of higher inflation and interest rates," he said. "Investment strategies, both bond and equity, should put these secular reversals at the top of their 'A' list when considering opportunities to make relative and absolute returns." Gross made his observations in his widely read monthly commentary posted on the Web site of Pacific Investment Management Co. in Newport Beach, Calif., where he oversees $305 billion as a managing director. He has said U.S. bond investors should expect 4 to 5 percent annual gains over the next several years, roughly half the rate between 2000 and 2002, and that he was buying for his portfolios some euro-denominated and emerging market debt. Gross also made waves last September when he said 5,000 was fair value for the Dow Jones industrial average. The index closed Monday at 8,109.82, 62 percent above that figure. In his commentary, Gross continued that U.S. hegemony has been based since the 1930s on military domination and a superior economy, until recently reflected in a strong U.S. dollar. The dollar, though, has fallen about 9 percent against the euro in the last two months, to about $1.08, on worry about the health of the economy and possible war with Iraq. Gross said that to combat terrorism, prominent economists like Paul Krugman and Nobel Prize winner Joseph Stiglitz are wondering whether to boost controls on global capital flows. Meanwhile, he said the United States is at times pursuing more restrictive trade policies, which might invite retaliation by other countries. The U.S. trade deficit widened in November to a record $40.1 billion, Commerce Department data show. As a result of the changes, Gross said, non-U.S. investors might pull more money out of the country. "Foreigners have and will continue to sell the dollar and U.S. investments in fear of guns and butter bills to come," he said. "America," he added, "will attempt to preserve its hegemony by biasing, and in some cases reversing, free trade and open financial market policies that do not favor the U.S. All of this implies that our peace dividend, not only in the terms of lower defense expenditures, but U.S. domination of (and benefits from) free capital markets and free trade, are nearing an end."