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Ta Da! This Guy!

Posted by kdadmin on August 1st, 2014.

As if to underscore my Wednesday blog post, The Seven Year Itch, the market plummeted just shy of 2% the very next day. Today, it’s down another 0.2%. To say that I’m a fan of vindication is probably an understatement. (Remember The Horsey Dance?)

On average, our portfolios did far better than the market yesterday. We were only down about 0.7%. That’s about 1/3 of the market’s loss. There is nothing like a cash overweight to mitigate the impact of market selloffs.

But wait, there’s more …

Remember my recent post about the dangers of speeding in school zones (School Zones & the Bond Market)? Guess what happened to the high yield bond market since we sold our positions on June 9th?

Boom. It’s down about 2.5%. But that’s not the best part. The BEST PART is that I just read an article entitled “Why the fall in high yield bonds was a surprise.” Of course, it wasn’t a surprise at all. Maybe for that author, but not for us! Excellent …

Further, Bill Gross, founder and managing director of PIMCO (manager of the largest bond fund in the world) spoke against foreign bonds after Argentina’s default, and said “Proceed with caution … It appears that the only safe haven is the front end of the U.S. yield curve in which the market expects the Fed to stay on hold for longer.” In other words, short term, high quality bonds. The only bonds we have owned since June 9th.

Gloating and ThisGuying aside, I do have a point. Well, actually two.

The first is … tell your friends about me.

The second is … Ah Ha Ha Ha!!! Who’s the man?! This Guy!!

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