Bill Gross Chastizes The Children Of The Bull Market, Excludes Itself
The fourth branch of government provides its uninspired precepts for approaching strategic asset allocation:
As of now, PIMCO observes that the highest probabilities favor the following strategic conclusions:
- Global policy rates will remain low for extended periods of time.
- The extent and duration of quantitative easing, term financing and fiscal stimulation efforts are keys to future investment returns across a multitude of asset categories, both domestically and globally.
- Investors should continue to anticipate and, if necessary, shake hands with government policies, utilizing leverage and/or guarantees to their benefit.
- Asia and Asian-connected economies (Australia, Brazil) will dominate future global growth.
- The dollar is vulnerable on a long-term basis.
So now that QE is the verge of ending, at least in treasuries, yet the Fed is a ways away from actually enforcing a restrictive money policy you can i) do what PIMCO does, which has so far been very good at "shaking hands" with not just government policies but the government itself, and has thus benefitted handsomely from the government's embracing of (un)free market capitalist socialism or ii) anticipate the market shock at the point where equities start discounting in earnest the government's many trillions of crutches starting to come off.
In summary, the only insightful thing in the most recent letter is the righteous beatdown of pro-cyclical permabull Barton Biggs.