http://www.minyanville.com/business-news/markets/articles/Pimco-Cyclical-Outlook-for-the-Americas/3/31/2014/id/54398
Monday, March 31, 2014
PIMCO SPEAKS
http://www.minyanville.com/business-news/markets/articles/Pimco-Cyclical-Outlook-for-the-Americas/3/31/2014/id/54398
STATINS
Who doesn't love a big market?
An article in today's WSJ, "New Drugs Emerge To Cut Cholesterol," states the size of that market: 50 million Americans.
What about them, what do they have in common? Well, they are all, according to some, candidates for the "most widely used and most lucrative drugs ever developed by the pharmaceutical industry," statins.
These are what some refer to as Wing-and-a-prayer announcements or priming the pump. To be sure, as one physician who was not connected with these new studies, noted: "There's not a shred of doubt that this is a very efficacious way to lower LDL (bad)" cholesterol.
But that's the wrong question getting answered. There is even less evidence that these findings will translate to preventing heart attacks and strokes, the so-called end point or reason for their existence.
With recent patent expirations popping up like spring flowers, a cynic might argue along with the aroma of spring flowers the odor of new patents is also in the air. And it's a very lucrative one.
http://online.wsj.com/news/articles/SB10001424052702303978304579471072404353460?mg=reno64-wsj
THE TWO BERNIES
Signs don't precede they follow.
Now that seems like a paradox if there ever was one. How many recognized the sub-prime mess after the fact? Or the dot.com bubble? Think tulip bulbs or a couple of generations ago the Nifty Fifty.
In the Good Book it says there's not much new if anything under the sun. What that means is there are only variations of past things or events. That doesn't make them new, only garbed in different clothing or packaging.
Investors usually learn this, if they learn it at all, over time. But by the time Hollywood gets around to parading it before the great unwashed masses it's older than all those glaciers climate-change folks worry so much about preserving.
Bernie Madoff and Bernie Cornfeld shared more than just the same first name. Both sported a certain code, a DNA hardly unique to them. Some call it greed. Others humanness. Being recent, the Madoff saga is still fairly fresh. Not so Cornfeld.
A former social worker, Cornfeld was a Columbia University product. The stars, however, seldom fall on social work. But mutual funds, we'll, that's a whole different stage. After some success selling mutual funds in the U.S. in the early '50s, a period when the investing public was finally warming up to them after a 25-year drought caused by the great 1929 Crash, Cornfield moved his stage to Paris where he sold shares, often going door to door, to American servicemen and anyone else who would buy.
Success breeds success. And by the early '60s during a bull market--who doesn't love them--he launched a new fund in new packaging called Fund of Funds, buying shares of other mutual funds inside his own.
Like all great pitchmen, Cornfeld had his own catchy oneliner: "Do you seriously want to be rich?" And he called it "people's capitalism."
His new fund was a trailblazer and he set out to find hot mutual fund managers to load up on to put the alpha in his new concoction. One of them was a guy named Fred Alger who became famous in his own right.
Cornfeld became rich himself and did his best to live up to the role, hanging out with celebrities and beautiful women and traveling the world. By 1969 his firm, Investors Overseas Services, Ltd. (IOS), employed 13,000 salesmen, had 750,000 clients in 110 countries and was called by one well-known magazine "the world's largest sales organization."
But, like an unwanted visitor, a bear market one day knocked at the investment door and his firm started losing capital. Three hundred employees filed a corruption complaint accusing him of pocketing money that belonged to them as shareholders. He was arrested and spent nearly a year in jail only to be acquitted a few years later.
By then, however, his best years of fame and fortune were behind him. Sooner or later everyone becomes prey including Cornfeld. Plagued by cries of wrongdoing, IRS woes and a flamboyant life style, he was forced to liquidate his fund. But that's another part of the story for another time.
Cornfeld died in London in 1995 at the age of 67. In his obituary the New York Times described him as "a Brooklyn-reared salesman who became one of the most flamboyant and controversial figures ever to streak through the American mutual fund industry..."
The key word here is streaked for, like it or otherwise, streaks can run both ways.
Saturday, March 29, 2014
PIMCO PERFORMANCE BLUES
Though not bad, some things turn out that way only in comparison to something else. If anyone's laughing, it's still a bit early to determine who will get the last laugh.
http://blogs.barrons.com/focusonfunds/2014/03/28/pimco-total-return-a-quarter-to-forget/?mod=BOLBlog?mod=BOL_article_full_blog_etf
COST OF ATTENDING A KNOWLEDGE BOX
If you're not familiar with the the high cost of a college education today, you probably been keeping your head somewhere where the Sun Goddess never shines.
According to some, college student loans have become modern day ATM cards for many of today's youth. Borrow the money, drop out and use the proceeds to get by. But that's only part of the story. Here's another part.
http://online.barrons.com/article/SB50001424053111903536004579465741592258398.html
A BRIEF COMMENT ON CORPORATE COMPENSATION
If you're a holder of Coca Cola stock you might want to join Dave Winters of Wintergreen Advisors who owns roughly 2.5 million shares. Winters is protesting Coke's new compensation package. Reason: excessive dilution of shares. Coke's performance the past two years, a proxy for management's performance, has been anything but stellar. So why is the company rewarding even less than mediocrity?
BANK ON THE ANECDOTAL
There's always a lot of market blabber about econometric models, quantitative versus qualitative data and plain old anecdotal stuff.
In medicine anytime the unexpected happens that the brains can't scientifically explain it's called benign remission.
In 2006 before the California real estate market started convulsing, we wrote a piece about seeing our first red-reduced-in-price sign on a tony lawn in a tony neighborhood near the beach 30 miles south of Los Angeles.
It was a familiar neighborhood, a spot where home prices went only one way--up. Here's a link to the article:
http://www.safehaven.com/article/4545/the-love-song-of-the-us-home-owner.
So what's the point? Just this. If you talk to people and banks about their mortgage experiences, just everyday banks and everyday people, you'll appreciate this piece in this week's Barron's.
http://online.barrons.com/article/SB50001424053111904628504579419442285646018.html?mod=BOL_twm_fs
Friday, March 28, 2014
DON'T LOOK NOW
And just when many of this same crowd thought coal was DOA, the anthracitic stuff is making an apparent comeback thanks to another favorite villain of this group, nuclear power. It's called Fukushima.
http://online.wsj.com/news/articles/SB10001424052702304688104579464942892719528?KEYWORDS=fukushima&mg=reno64-wsj
THE UNKNOWNS
Unknowns are are just another way of saying there might be something to lose here. It's a four-letter word people fear, Fear! Talk about a motivator and that's what these folks are discussing.
http://www.bloomberg.com/news/2014-03-28/global-growth-at-risk-as-ukraine-adds-to-known-unknowns.html
NEXT MOVE UP TO MARKET
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