Ask Rande

Top 1699. Aug 9, 1999 6:36 AM

» KirkL - No Guts.

No Guts...No Glory!

It gets tempting Rande...

.05% away and counting!

I have money sitting in MMF that would sure work well for transfer. Even some GNMA funds could be moved over to BTTRX. Perhaps I should find those posts on BTTRX again? Where we discuss how people can buy it without a load or Fee? I forgot the restrictions on Schwab which is where I have cash now... as well as Fidelity. Easy enough to write a check and move the funds.... Hmmmm....

-- posted by KirkL

Top 1700. Aug 9, 1999 12:50 PM

» BillR_5 - Bonds

6.24% at 4:00 PM Monday!

-- posted by BillR_5

Top 1701. Aug 9, 1999 1:00 PM

» KirkL - Amazing Bill.

Amazing Bill.
I wonder if someone will ring a bell when rates peak? 8)
Rande perhaps?

-- posted by KirkL

Top 1702. Aug 9, 1999 1:13 PM

» RandeS - Kirk/Bill,

Kirk/Bill,

Looks like the long bond closed at around 6.225%. I called no action today. Want to see how things play out over the course of the next week or two for the stock market. I'm only talking about the fringes (deferred accounts), but depending on the extent of the correction the potential upside for equities may be as attractive (for a shorter-term tactical allocation play).

-- posted by RandeS

Top 1703. Aug 9, 1999 5:03 PM

» KirkL - Agree Rande.

Agree Rande.
It seems that selling into strength then holding cash to buy bonds on a pull back was a good move for me this last time we were at highs (or HWP was at highs). Previous sales went straight to bonds and then the bonds have gone down...
Interesting trying to play for the extra few percent "market timing" after all we say on how hard it is to do. Guess it is just hard to resist. You know that the B-Man has been saying to stay short in durration. I wonder if it will have to get to 7% again for him to consider zero's?

Agree it is hard to take money from the market that is off nearly 10% to get a bond return just a bit more than that... but if someone has cash from lowering allocation at the last time we were at highs (like me) then if might be a good idea. Even putting the cash into GNMA's might be good enough as you don't get dinged for short term trades and can write checks on the account (if at Vanguard).

Kirk out

-- posted by KirkL

Top 1704. Aug 9, 1999 5:51 PM

» RandeS - Kirk,

Kirk,

I've stayed short/intermediate on the durations since early in the year -- even using GICs in the 401(k). Tempting to move to long-term zeros in here, but may just opt for an over-allocation to equities using the deferred accounts if things play out right in the next few weeks. Market timing? I suppose so. And here is where the likes of BB, Abbey, Byrini and others have been so helpful in the past (though currently, it's become a bit problematical for BB, at least). It's the wholesale exiting and hopeful re-entry at the opportune moments that leave me skeptical. No problem with a tactical move on the edges -- if you're right it boosts return, and if you're wrong it doesn't kill you. I suppose I'm just not "smart" enough, or lack the confidence some have in others, if not themselves, to go hog wild. Though, who knows? Given the proper set of circumstances and high level of personal conviction, I might do something rash someday. For now, content to remain "fully invested" along the lines of the long-term asset allocation, while contemplating a little over-allocation one way or the other for a time, depending on how things play out.

-- posted by RandeS

Top 1705. Aug 9, 1999 7:01 PM

» KirkL - Interesting.

Interesting... Sounds like you are reading the tea leaves the same as I for next few quarter and year's earnings. Next Summer, we could be 20% higher from here with a bit of multiple contraction thrown in if some growth projections I just saw come true. Abby, JoeB, Byrini and even Ralph have been good bulls for sure. I don't understand BB's problem unless it is fallling newsletter subscriptions. His earnings estimates are/were pretty low so maybe he sees inflation as a bigger threat than most? He is still fully invested so we might look at what he does and not what he says as the jawboning is....'nuff said. I think Ralph just went neutral as he sees a correction going deeper and thinks we will be within 5% in three months which is the deal on the show. Heck, Old Lou might have bought him dinner to make a change if he was close just to make WSW a bit more interesting! Not a flip-flop, but calling the market as he sees it short term (which he is PAID to do).

My thinking with rates/correction is to play with term. Move to longer term to lock in high rates with short and intermediate term money and still keep the allocation the same. Some do consider being long similar to stock market investing so....Hmmmm.... no decision yet on my part, but I enjoy sharing the discussion and ideas here.

-- posted by KirkL

Top 1706. Aug 10, 1999 5:12 AM

» Gene - Interesting Part II

Kirk / Rande,

I also have been "window shopping and looking" at Bonds at these levels, who knows maybe today. And even looking at maybe increasing some more Equity exposure but not buying there yet. There is something with this current phase of the market cycle that has me without a lot of conviction in any direction. Maybe the it is all the conflicting market moves that are resulting from now about 6 million O/L traders (all types, not day trader types) and 30,000 more signing up daily according to brokerage figures combined with all the institutional buyers and Mutual Funds now trading in this market!

Lately, I have even started to wonder if the real danger after this current bout of inflation jitters is dealt with via Greenspan raising rates, is that we may be in for more of a small recession around the bend if Greenspan's moves don't negotiate that proverbial soft landing! Not any massive inflation fears, Bear market or a total collapse per Roger but an old fashioned recession.

Why? Well a few items, that incredible USA trading deficit that maybe finally catching up as well as the falling dollar and fall out from that, rising global activity, our continuing negative savings rate.

Since I currently have an Asset Allocation I'm comfortable with, I can wait but may start to play around the margins with some Cash to Bonds as these prices are very attractive to continue lowering my cost and accumulate. In addition I'll have to make sure my equity shopping list (individual stocks & mutual funds) is up to date as well as that proverbial BB exit strategy!

Whew, too much going on for me, so I'm going out for breakfast with a couple of friends before the market opens since I just saw that S&P futures was down -6.0 to -8.0!

Gene

-- posted by Gene

Top 1707. Aug 10, 1999 5:38 AM

» RandeS - Kirk,

Kirk,

Tough times indeed at the moment, but only relative to the wonderful gains we've become used to. To be honest, I wouldn't mind a more protracted period of "difficulty." Last fall was too quick. This is what investing is REALLY all about, for those who came on board in the last few years. It's sad to see the hand-wringing over losses in GNMAs during the last few weeks. A couple of percent, for goodness sake! These folks don't need to complete a risk tolerance questionnaire -- it's obvious they don't belong in anything but bank CDs and T-notes. You can read every book on the reading list and have a good academic knowledge of how markets work, including a book understanding of Oct. 1987, 1973-4, etc. BUT, until you loose some money for more than a month or two, it isn't real. And what is reality? Reality is the fact that you can't expect to enjoy stock market gains without being willing to "suffer" through periods of loss as well. Over time, the hope (and historical experience) is that the periods of gain outweigh the periods of loss. Only works if investors are willing to sit through both. My hope is that we have a period of at least six months of consolidation -- time enough for rates to settle down while earnings catch up to prices. I'm just not sure how many will stand for such "prolonged" erosion. I will not be surprised if we end up near 11,000 at year-end. Furthermore, if that's the case, I will not be surprised to hear some bemoan the fact that we did "nothing" between April and December, despite the fact that it will still represent about 18% gains for the year.

-- posted by RandeS