Well, I woke up this morning, looked at the market futures, and then watched the market open. It is still acting stupidly today, although it is acting stupidly in the way one would think in a market that ultimately wants to go up.
- The dollar and world shares edged higher on Wednesday, clawing back some of the previous day’s steep losses as investors sought out bargains.
Yet, the center cannot hold some say, and maybe it won’t, but the fact remains that despite the all volatility, the VIX is still holding at just about the right spot – 16.5. That is down from last Thursday when it climbed up just about two points higher.
So, we have “buy on the dip and sell everything else if you’re afraid” as the steady strategy these days. That’s fine. It is summer. We can all take a little vacation, a break from reality to enjoy the kids, grandkids, nieces, nephews, uncles, aunts, and the family dog. In fact, some folks out there in Wall St. land need a vacation.
Didn’t I just yesterday question the credibility of Bill Gross, the head of Pimco, the world’s largest bond fund? I mean a guy who is losing billions of dollars in the 2013 market shouldn’t be out there offering advice to the world of investors.
- High debt levels have raised the chances of a global recession in the next three to five years to more than 60 percent, said Pimco, which manages the world’s largest bond fund.
Pimco is Bill Gross and it seems the man feels the need to create a fear about the market. He understands that folks will suffer low yields and even some loss (-1.9% in 2013) to protect their principal from the ravages of recession, if they believe a recession is coming. The reason Mr. Gross feels the need to create such a fear is that he might be feeling that sense himself.
- Bill Gross’s Pimco Total Return Fund (PTTRX), the world’s largest mutual fund, suffered the first client withdrawals since 2011 last month as global bond markets tumbled the most in nine years. Investors pulled $1.32 billion from the $285 billion fund. An exchange-traded version of the Total Return (BOND) fund saw clients pull an estimated $64.4 million, the first ever withdrawals since the ETF’s inception in 2012.
True, a total of $2 billion of the $285 billion is not much. Nevertheless, it is $2 billion in withdrawals from a fund that is not used to withdrawals. Maybe folks are getting tired of losing money in 2013 when most everyone else is seeing double-digit returns. As well, maybe other learned folks are getting tired of hearing Bill Gross, the “Bond King,” spew forth his wisdom.
- The Bond King’s essay [“Wounded Heart”] struck me as containing some of most fundamentally unsound economic and financial analysis I have ever seen published by a respected analyst – much less from an investment hall of famer.
You know, even the greats eventually run out of mojo. The day comes when they just cannot put it out on the field like they used to do. When that day comes, it is time to retire. Just sayin’ …
The market has rolled over already. The DIJA has lost most all of its early gains, a turnaround of some 140 points. The VIX is now in the green, up about 1/2 a point. Yup, the market is acting stupidly, but don’t fret. This too shall pass.
Trade in the day; Invest in your life …