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Is that what's called a bias.<g>
chas
----- Original Message -----
From: Gary Funck <gary@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, September 06, 2002 7:10 PM
Subject: RE: [RT] Fortune.com Retirement 2002/Bill Gross
>
>
> > -----Original Message-----
> > From: John Cappello [mailto:jvc689@xxxxxxx]
> > Sent: Friday, September 06, 2002 10:41 AM
> > To: realtraders@xxxxxxxxxxxxxxx
> > Subject: [RT] Fortune.com Retirement 2002/Bill Gross
> >
> >
> >
> > The forward below is a profile of Bill Gross thoughts. Why would
> > anyone expect anything different from this Bond guy?
> >
>
> Here's Bill Gross's full commentary on PIMCO:
>
> http://www.pimco.com/ca/bonds_commentary_investment_outlook_0902.htm
>
> concludes:
>
> [...]
> If you've got even half of your marbles left, I'll bet you your number is
> nowhere near today's level of 8,500. That means that in order to get a
real
> return sufficiently higher than 3.0% to meet your "risk premium"
> requirements the market has to go down before it can go up again. And when
> it starts to go up again, it's only going to produce inflation adjusted,
> real returns of 5% over the long run if it mimics what the market has
> returned over the past 100 years (absent a tripling of P/E ratios). Until
> then, stocks are losers and anyone who owns too many of them will be
losers
> too. As Warren Buffett has said, in the short run the stock market is a
> voting machine but in the long run it's a weighing machine. Despite being
> down nearly 50% from its highs, this market remains overweight. Forget
about
> "Stocks for the Long Run" until they slim down to the point from which
even
> yours truly can admit that they will outperform the bond market. And if
some
> of this is confusing, just remember this: the market needs to yield close
to
> 3.5% before it approaches fair value, and that means DOW 5,000. While
stocks
> are the best bet over the very long term, they will not be, nor will they
> beat bond returns until they begin the race from a fair valuation. Since
in
> the short-term the stock market is a voting machine/popularity contest,
it's
> impossible to say exactly when, if ever, this fair valuation mark of
> approximately Dow 5,000 will be reached. If it doesn't get there however,
> future real equity returns will be lower than 5%, and a diversified
> portfolio of government, mortgage, and corporate bonds will be the best
> performing asset class for years to come. And oh, one large caveat. If the
> bond market continues to rally and the Fed can successfully engineer a 2%
> long-term TIPS rate instead of 3%, then stock markets are actually within
> 10% of fair valuation. That, however, would continue to support the case
for
> bonds as the better performing asset class. Sounds like an opening for a
> bond geek to write Bonds for the Long Run. Count me out - one book's
enough
> for me.
>
>
>
> To unsubscribe from this group, send an email to:
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>
>
>
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>
>
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