valuecfa

The only two retail products i am aware of are JGBS and JGBD.

Coincidently they came out with exchange traded ETN versions of a short futures JGB for retail investors. Though you might want to buy a DB put if you considered them.

I simply use futures. We have a pooled fund, so don't have difficulty meeting the hurdle.

First they give away gold for JGBs, now they change the way they calculate their GDP (gotta bump that denominator a bit). Will this buy them additional time? To me, these moves suggest just how worried they are getting that the endgame is near. http://www.xe.com/news/2011/12/07/2332133.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art9 Disclosure: Short Japanese credit

Seems an action of desperation to me. http://www.bloomberg.com/news/2011-12-06/japan-offers-gold-coins-to-bond-buyers.html

I think it is difficult to ignore the macro environment at this point in time. It is pretty terrifying.

Bass makes an incredibly compelling case for that (among other things) in this video I just got done watching. Shorting Japanese insurers that hold a lot of government bonds is something I am exploring. http://www.youtube.com/watch?feature=player_embedded&v=WWgtzwqWh60 i read that the japanese own 95% of their own debt. seems like it's in stable hands and not leveraged. also japan can print money and monetize the debt if need be. if bass gets this one right he should run for King of the World. He would get elected. I've come across similar figures around 90%. The Japanese economy is incredibly leveraged, and i think it poses more risk over a shorter period of time being in like-minded hands. If Japan prints money to monetize the debt that would only add more fuel to the fire on the direction of interest rates. It really is astonishing, the dynamics of the current interest rates in Japan relative to its demographics and economics. It is only a matter of time before Japan defaults (but it could perhaps be a ways away, though i don't think that will be the case). The 10 year old question is, when? If rates only go to 3% then interest expense alone would eat up more than half of the government's tax revenues, nevermind their entitlement programs and domestic spending. Its like a giant elephant is standing in the middle of the room and nobody notices it is there. The trade has been around for a long time, nicknamed the widow maker. The math has made sense for a long time. The only question is when do the domestic investors finally stop purchasing. The fact that their is an indirect government law for Japanese financial institutions to hold Japanese bonds has helped contain rates as well over the years. The sovereign problems in Japan seem the most obvious and the math is getting beyond silly.

I agree with Mr. Bass in that the Japanese Bond short trade appears attractive, and perhaps has a good negative correlation to the equity markets.

Thanks for pointing this out. This is an incredibly important point, and it is the one thing that leads me to believe i may be incorrect in my thinking. The corporate debt markets don't seem that worried, at least not in the investment grade field. Though BIG rates have deteriorated significantly recently. This can turn on a dime as systemic risks come about quickly. However, thanks for pointing that out.

In regards to Europe only, i probably should mention that i think they will eventually print in large quantities (or directly or indirectly provide financial guarantees), but best as i can tell they may likely end up doing that only as a last resort due to various reasons. It is the meantime that i am curious about. The moment in between now and then. I don't think the markets yet grasp its significance and seems the politicians may wait only until things get much worse before they react in any substantial degree. This is all forecasting, take it for what it is worth.

Does any one else have that eerie feeling that the Europe contagion could develop into something quite substantial and that the market does not seem to fully comprehend its significance yet, but that they will soon enough when the talking heads begin to see its effects? I wonder what growth will be like over the next few years if Europe & China continue to slow down (or pop in China's case), real estate prices in Australia, Canada, and China begin to decrease significantly more, worldwide austerity measures begin to slow growth further, layoffs increase in the public sector as a means to further cut deficits, worldwide deleveraging of assets to maintain above water balance sheets continues, household debts begin to decrease (i.e. save more, spend less). Seems to me that the market may deserve a much lower than normal multiple to historical earnings than the long term average, given the incredible lack of uncertainty in near term (~3-5 years) growth . Yes, the US and rest of the world have been through many devastating things (world wars, hyperinflation, deflation, etc) and will eventually pull through, but how anyone can have a positive macro outlook for growth over the next few years in bewildering to me. Just rambling i guess. I haven't had a four day weekend in a while, so perhaps i am thinking about it too much. Thoughts/comments?

Currently at -12% YTD. (still waiting for the financials' day in the sun) Fairly concentrated at the moment which has produced a pretty remarkable amount of volatility so far. About 20% in cash equiv.

I'm curious what the board's general consensus is for a fair value for the S&P at the moment, factoring in all macro/micro events, point in cycle valuations, shiller valuations, earnings, high corporate profit margins, GDP expectations, austerity measures going forward, China, oil, balance sheet recession, consumer/gov debt ratios, relative valuations to fixed income alternatives, unemployment & inflation/deflation expectations going forward,....etc? Of course, the easy answer is- Who cares i am a stock picker!....A bottoms up investor! -Putting that thought aside what's your fair value on the S&P? ...a range of numbers perhaps. I'd create a poll of i were savvy enough. I had dinner with Phil Orlando from Federated last week and he was suggesting a 50% rally in 12 months time. This dinner got me pondering what i think is a fair S&P valuation.

While i hate to see Fernandez leave the fund, I am extremely pleased to see the fund's size decrease so much over the past year. I liked what i heard and read from Fernandez. He made sense when he spoke, as does Bruce. So few do these days. Bruce is the reason i have some family money with the funds, but I think fairholme is losing another person of talent.

Is there a way to adjust the layout of the board that i am unaware of? Just doesn't feel quite as homey since the color/layout change. Sorry if already discussed. edit: looks like it was just discussed a few threads down. oops.

A trader just sent me an detailed email that there is a new rumor being floated JPM may buy BAC with the help of treasury. This is how things start...it's just a rumor that I imagine is floating across the trading desks this am. I don't buy it but thought I would pass it along

I am starting to think that it is all about Berkowitz (and maybe Paulson) and some of his concentrated positions (MBI, AIG, C, BAC, and he does not have the warrants). It is almost as if there are bets based on redemption pressures ... the type of scenario for why he always wanted some cash. I think so too. I'm sure that there is legitimate fear surrounding these names, but Berkowitz is a concentrated investor with public cash flows. I opened a position in BAC today and, wonderful news, I am already down! I own enough MBI, otherwise i would have begun adding more today. I did however open a BAC warrants position today (and hopefully a bit more on Monday as they didn't decline as much as i thought they would). Getting close to being fully invested now and am more drastically reducing corporate bond exposure in favor of equities... Lots of companies on my watch list are at or near my purchase price. Looking forward to spending the weekend looking for leftovers that i may have overlooked. I definitely don't think the broad market is extremely cheap, but it does seem to be one of the more cheaper asset classes.

So, i need to find at least 1 or 2 mutual funds that only invest in US Governments and/or Agency bonds. It has to be 100% invested in fixed income of something with an implicit or explicit Gov. guarantee. It has to be this type of a fund for Guardianship type accounts that have legal statutes that require only such type investments. I had my research assistant look into this for me and the funds he brought to me were technically not 100% invested in Gov. &/or Agency bonds, even though they implied so in their title, such as Loomis Sayles Ltd Govt. and Agency (NELYX) whose prospectus actually states: "the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in investments issued or guaranteed by the U.S. government, its agencies or instrumentalities". So 20% won't be invested in such a manner, so that voids this fund as an option (or i would get in trouble with the judge). I gave it a bit of my time and had a bit of trouble finding such a fund that is actually 100% invested in these types of securities, with a low expense ratio and load free, that doesn't have a high minimum $ requirement (b/c we don't have too many of these type of accounts). Anybody know of such a mutual fund off hand? The intention is to put about 10-15% of an account's assets (labeled guardianship) into such a fund(s) and then purchase individual agency and govt. bonds (no corporates) for the rest. If anybody already has a fund in mind that fits the bill, I'd appreciate a mention and save me some time next week. I figure at least one person on the board can think of such a fund(s). Thanks

No, not the wrestler. Al Mann is actually quite the interesting fellow, having great success in several industries (while the jury is still out on his latest venture, MNKD). If you care to see his background in his companies, including the current one, you can see this speech he gave at Yale. http://streaming.yale.edu/cmi2/orator/OCR/20100916/OCR20100916.html

What terms of recourse does the lender have in Vancouver compared to Florida which also has recourse financing? And Nevada which does too? I'm not suggesting that would prop their market up. I was just asking the question, b/c i don't know the answer (& don't have the time to research it this morning) and i was curious.

I don't doubt the Vancouver area is overpriced, but doesn't Canada have recourse home financing along with, generally, large down payments?

Ditto, big fan of Gundlach. The guy has loads of talent, but there is something i just don't trust about him. Maybe it was the heap of dildos and porn he kept in his office, or maybe it is his arrogance. Loads of talent though.

LOL, I think you would be among the group which would benefit the most. Aw where is Bronco, I would like to see the dividend vs. buyback debate again. I'd like to see them do either a large repurchase of shares or pay a large special dividend, preferably the former at current prices.

I could see the US possibly ending the Roth IRA (it is such a great vehicle) for new annual contributions at some point well into the future (under more dire circumstances), but not turning accounts that are already ROTH IRAs in to taxed accounts.

Sorry,I wasn't very clear. I meant that it might be better for the job candidate to submit a research report on the company explaining why the stock they pick is their best idea. (or even better have them pick several stocks, and submit reports on each of them). This way you can judge their analytical skill in addition to how well their investment thesis played out. Just picking a stock and getting lucky might get you several candidates at the end (for the final interview) that did just that...get lucky. I'm sure you are aware of various stock picking contests where the winner knows little to nothing about picking stocks, and he/she just got lucky. My younger brother, while in business graduate school, came in first or second place (i can't recall exactly, but he was at the top) in a class stock picking competition that lasted one year. He randomly chose 3 companies that he could not change throughout the year. He happened to, by chance, pick 3 defensive companies (if i recall Playboy co. and several beer companies were what he picked--i know real mature :P) and then the market fell quite abruptly at the time and his defensive picks put him at the top of his class for this competition, even though he knows relatively little about stock analysis. He just randomly picked 3 companies and they all happened to work out ....Good thing he decided to go to law school after getting his graduate degree...he is a much better immigration lawyer then stock picker. -By the way this was a finance class with very bright students, and he just got lucky and happened to beat them in this stock picking contest. It's not the best method in my opinion, just having a stock picking contest. You might have group of final candidates in the end that know little about stock picking, but happened to win a stock picking contest. That's why i was suggesting adding a few other parameters that will help you judge a job candidate's skill vs. luck.