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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (27605)	3/2/2005 12:13:39 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 110194

I remember when US Trust, which was one of the largest trust players then and may still be, was absolutely demolished by the 1973-1974 market. They had fallen for a scam called "one decision" stocks. Similar to Warren Buffett, with the exception that the one decision has to be good. <G> They looked pretty good when the market crashed but the Nifty Fifty held up. But then the nifty-fifty hit the skids and they had zero protection. The new scam the trust funds are into is asset allocation with periodical balancing. I call it "let's buy some of everything, guaranteeing we will never outperform and that we'll definitely participate to some extent in the next asset to crash." The rebalancing may help them approach index numbers (before fees), because at least they buy more of the crashed asset and sell some of the rising, assuming there is one. In actuality, most asset allocation programs have zero intl. bonds, a 5-10% weighting of intl. stocks, and a huge exposure to large cap domestics. Whatever resource stocks they own are pretty much at an S&P weighting. Which means that a dollar run will kill their clients.