Stock Investing As We Know It Will Soon Be Dead: PIMCO’s Bill Gross

English: Mohamed A. El-Erian, Managing Directo...

English: Mohamed A. El-Erian, Managing Director of the Pacific Investment Management Company, speaking at the World Economic Forum Summit on the Global Agenda 2008 in Dubai, United Arab Emirates. (Photo credit: Wikipedia)

Gross, the co-founder and co-chief investment officer of bond giant PIMCO, says it is time to write the obituary for stock investing as we know it.

Writing in his August investment letter, the manager of the world’s largest bond mutual fund said lower returns on stocks — and bonds, for that matter — means individuals will have to work longer to save for their retirements.

If financial assets no longer work for you at a rate far and above the rate of true wealth creation, then you must work longer for your money

“If financial assets no longer work for you at a rate far and above the rate of true wealth creation, then you must work longer for your money,” Gross wrote.

Gross, whose Pacific Investment Management Co has US$1.82-trillion in assets, took particular issue with the noted economist Jeremy Siegel, who popularized the notion that a portfolio of stocks can return on average 6.6% over the long haul.

“The Siegel constant of 6.6% real appreciation, therefore, is an historical freak, a mutation likely never to be seen again as far as we mortals are concerned,” he said.

Gross’ August investment letter is a bit reminiscent of BusinessWeek’s famous “Death of Equities” cover story, which appeared in 1979, just before the start of a big bull market.

Gross, whose firm launched its first actively-managed equity mutual fund in 2010 and has former Troubled Asset Relief Program leader Neel Kashkari as its head of global equities, said bonds are no salvation either.

In his April investment letter, Gross struck a similar tone on total return expectations. Gross then said investors should get used to smaller investment returns because of slower global growth and as the financial services industry continues to deleverage, or reduce its reliance on derivatives and borrowed money to generate higher returns.

This time around, Gross said at their currently low interest rates, investors should expect “mere survival” from their bond investments.“With long Treasuries currently yielding 2.55%, it is even more of a stretch to assume that long-term bonds – and the bond market – will replicate the performance of decades past,” he wrote.

In his August letter, Gross says the only “magic potion” monetary policymakers have to try and get higher returns for investors is through inflationary policies.

He said inflationary policies might work for bonds, but that they are bad for stocks. And over the long term, Gross said using inflation to solve retirement ills is not a real solution.

“Unfair though it may be, an investor should continue to expect an attempted inflationary solution in all almost all developed economies over the next few years and even decades,” Gross wrote. “The cult of equity may be dying, but the cult of inflation may have only just begun.”

“The problem with all of that of course is that inflation doesn’t create real wealth and it doesn’t fairly distribute its pain and benefits,” he continued.

Gross in June kept the proportion of U.S. government and Treasury debt in his US$263.4-billion Total Return Fund unchanged at 35% of assets, according to a report July 11 on the company’s website. Mortgages were at 52% for a second consecutive month. Pimco doesn’t comment directly on monthly changes in its portfolio holdings.

In developed nations, Gross has advised investors to favor debt of the U.K., as well as the U.S., as Germany faces risks related to the eventual costs required to end the region’s worsening sovereign and banking crisis.

The U.S. Treasury market is considered the cleanest “dirty shirts” for investors, Gross wrote in his previous commentary. “Don’t underweight Uncle Sam in a debt crisis. Money seeking a safe haven will find it in America’s deep and liquid, almost Aaa rated, bond and equity markets.”

Pimco’s Total Return Fund gained 7.3% during the past year, beating 73% of its peers, according to data compiled by Bloomberg.

WHICH IS WHY –  You need An Edge 

Are Your Investing Results Mediocre ?

Are you facing the facts ? – do you even know what your return was for the last six months ?

Do you have a written record of why you bought a particular stock , the time lines are results you expected , the review and   update of your selection(s) ?

Lack of a written plan gives you the ambiguity to mask your performance and avoid the responsibility for the results.

You can make the change :

Ask yourself the hard questions – what are my expectations/ results and what must I do to change if the results aren’t what you want.

It is true that you can’t control The Fed or the euro zone crisis – but you are the one who choses your portfolio – and to remain or change your selections each trading day.

You don’t have to have a 500 page plan like that outlined in my book – but no plan is a plan for no success ( pardon the lack of grammar.

How many books on investing did you read this year ?

What are you doing differently from last year ?

Don’t remain in denial – face your demons and move up to success .

Yes- I’d be happy to meet you and put on a one full day seminar.

The cost – $ 249 and the organizer receives his or her seat for organizing the event .

You can contact me direct by email to jackabass@gmail.com

All You Need To Succeed –

in 500 pages of Investing Strategy

and Selections

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at http://www.amazon.com

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today’s stock market [Paperback]

Jack A. Bass (Author)

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The AMP Seminar In Your Town

Stock Market

Stock Market (Photo credit: Ahmad Nawawi)

Yes- I’d be happy to meet you and put on a one full day seminar.

The cost – $ 249 and the organizer receives his or her seat for organizing the event .

You can contact me direct by email to jackabass@gmail.com

All You Need To Succeed –

in 500 pages of Investing Strategy

and Selections

Stop Dreaming AND Start Doing

It breaks down the myths that you can’t achieve great success from scratch – in fact, you’ll learn otherwise: by implementing the tools , strategies and selections you will be well on your way to the stock market success you deserve.

 

Stock Market Magic:

                 Building Your Apprentice Millionaire Portfolio “

To register e-mail info@jackbassteam.com – you can use your credit card or PayPal account .

Seminar Outline :

Key : There is always money to be made by investing in the right stocks at the right time.

Did you know that roughly half of a stock’s price movement can be attributed to the group that it’s in?

• Did you also know that often times a mediocre stock in a top performing group will outperform a ‘great’ stock in a poor performing group?

• And did you also know that the top 10% of industries outperformed the most?

Do you want to learn more about how to choose the right stocks to build your portfolio and to profitably trade the volatility in the market ?

This seminar will  include an overview of the most recent market news and developments – the direction of the economy , interest rates and what THAT MEANS for our stock market selections in sectors that will benefit most in the current economic conditions.

Knowing the latest market directions will provide you an advantage in building your portfolio – to align your stock selections with the sectors that will take advantage of market trends .

KEY : We will  discuss individual stock selections and portfolios – the best stocks/sectors to invest in now (and for the future). We will show you our proven trading strategies and the simple but very effective trading techniques that you can use yourself.

An open Q&A session will also be held at the end to answer any questions that you may have. During the seminar you will have the opportunity to meet Jack Bass to discuss your specific questions as well as the opportunity to meet like-minded investors .

 

Take your game up a level  – or three.

Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012: All you need to succeed in today's stock market

Available at http://www.amazon.com

Stock Market Profits are Yours -

but only if you have the tools  available in

   this book.

Podcast Interview

The latest interview ( host Christine Till ) is available at :  http://www.practicalpodcasting.com/how-to-protect-yourself-jack-a-bass-b-a-ll-b/

What I learned from Tony Robbins

English: Motivational speaker Tony Robbins at ...

English: Motivational speaker Tony Robbins at a Twitter conference in 2009. (Photo credit: Wikipedia)

This evening I attended  a seminar . The topic was  how to take control of your life by setting out the outcomes  you desire in writing  – and then taking action to accomplish those outcomes.

One lesson that stands out is that   to accomplish the goals you identify  – “ Action is more important than Knowledge “.

In the stock market all the knowledge in the world won’t help you build your portfolio if you never take action.

The Lesson as applied to stocks?

Here are a few recurring themes in the emails I receive – see if you can spot the problem -

“Thank you for the market letter  I am going to read that book soon ” OR

” I can see that I need to set out a strategy one day ” OR

” I have your book and I intend to read it very soon”  OR

 …  started reading your book and am thinking of using the trading strategy but before I can , I need  to wait until my shares are back in positive territory

What is wrong with this picture ?

Folks – why bother reading the book or market letter and only dreaming about  following the trade ideas or coming to the seminars? Better to consider spending your time watching
TV and avoiding the frustration of knowing where to learn to do more with your stocks/ portfolio . Trying is lying. Don’t lie to yourself. If you want stock market  profits then take action . The book ” Stock Market Magic: Building Your Apprentice Millionaire Portfolio is available now from Amazon.com The operative word is NOW.

I do not want to embarrass those readers who are kind enough to write  – I just want to help you  face up to the issues that prevent you from moving forward. Knowledge isn’t power ,  ACTION is power.

Q :  What are you doing to raise your portfolio returns ?

AMP Seminar Outline

Stock Market

Stock Market (Photo credit: Tax Credits)

June 6, 2012

Contact  info@jackbassteam.com

Registration avaialable at  http://www.jackbassteam.com ( Use Seminar  button on the left hand menu)

Outline

Do you want to know more about how to trade the volatility in the market. This seminar will  include an overview of the most recent market news and developments – the direction of the economy , interest rates and the stock market. Knowing the latest market news and directions will provide an advantage to building your portfolio .

KEY : We will  discuss individual equities and portfolios as well as the best stocks/sectors to invest in now (and for the future). Most importantly we will show you our proven trading philosophy and the simple but very effective trading techniques that you can use yourself.

An open Q&A session will also be held at the end to answer any questions that you may have. During the seminar you will have the opportunity to meet Jack Bass to discuss your specific questions as well as the opportunity to meet like-minded investors such as yourself.

Topics include:

Is the economy set to recover or slow down – and what stocks match each scenario . ( We will provide stock selections that can be easily recognized as senior / intermediate and junior selections in each of the sectors of the market).

Is the EuroZone threatening a new banking crisis – what banks should we be buying – which should we avoid ?

Why Gold – and should you invest in bullion or mining companies ?

Is Natural Gas going to recover?

Are we running out of oil or is there an oil glut ?

Does Facebook signal the end of tech stocks or will Apple become a star for this decade ?

Fundamental analysis? What’s that? Relax, it is easier than you think. You don’t need to perform an in depth analysis. You only need to know a few fundamental company information to see if the stock is right for buy & hold purposes.

What Is Warren Buffett Doing Now ?

Is there a  Uranium / Nuclear revival ?

Your Package Includes:

Your own copy of Stock Market Magic

An update on the stocks on Jack’s AMP Watch Lists

A preview of Jack’s Newest Book  : The AMP Gold and Silver Portfolio ( a fall 2012 release)

Join Us ! – and  we would like to present the seminar in your city . If you or your organization would like to act as a sponsor  ( or are seeking a speaker) please communicate with us at  info@jackbassteam.com

Yamana Gold – Update and New Target Price $25

Yamana Gold

Yamana Gold (Photo credit: Wikipedia)

Yamana Gold Inc. May 2

Note : Yamana is featured in the Precious Metals Watchlist in the new AMP Book – Stock Market Magic and is a feature of my speaking tour.

AUY : NYSE : US$14.73  Buy , Target US$25.00

Q1/12 results in line

Recommendation

We maintain our BUY rating on Yamana Gold following the release of Q1/12 results and a robust reserve update. Yamana’s shares continue to offer growth at a reasonable price (P/NAV 0.78x vs. peer group 0.78x and 2013E P/CF 7.0x vs. peer group 7.6x) and a dividend yield of 1.5%.

Hiighlights

Q1/12 adjusted diluted EPS was $0.25 vs. our estimate of $0.25 andconsensus of $0.24. Lower gross margin on lower sales volumes and realized copper price was offset by lower non-operating expenses. CFPS of $0.30 was lower than our estimate due to higher cash taxes paid in the quarter and zero dividends received from the equity stake in Alumbrera.

Gold-eq production was 278,832 oz, but commercial production was 269,873 oz (excluding one month of Mercedes commissioning), and gold-eq sales were 273,494 oz at by-product cash costs of $292/oz (co-product costs $518/oz) vs.our estimate of 275,000 oz at by-product cash costs of $186/oz (co-product cost $533/oz).

Copper production at Chapada was 30.3 Mlb (sales of 27.3 Mlb)at cash costs of $1.51/lb vs. our estimate of 37.4 Mlb at $1.52/lb.

The first partial quarter of commercial production (effective February) at Mercedes came in better than expected, i.e., 14,994 oz at $534/oz vs. our estimate of 12,000 oz at $614/oz, largely due to better-than-expected gold and silver grades.

Valuation

Our target price of US$25.00 remains unchanged based on 1.2x our 5%/peak NAVPS estimate of US$20.42  Our 2012E EPS was revised to $1.23 .

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