Share to Twitter Share to Linkedin A few weeks back, bond giant PIMCO trimmed a bunch of payouts from its closed-end funds (CEFs). Which was no bueno for income investors, who buy CEFs solely for their dividends. We don’t own any PIMCO funds in our premium portfolios currently. But readers, who rightfully recognize me as a PIMCO fanboy, have written in to ask what’s up. “Any thoughts on PIMCO recent slashing of dividends? Do you think they will also cut PDI’s dividend?” — John S John, you know me well. Maybe too well! My nightstand currently boasts a copy of The Bond King: How One Man Made a Market, Built an Empire, and Lost It All . (I’m 128 pages in… and would enthusiastically recommend it to fellow fixed-income geeks.) Bond nerd or not, most of us dividend investors do know the “Bond King” Bill Gross. He was Morningstar’s Fixed Income Manager of the Decade from 2000 to 2009. Gross netted 7.7% yearly returns for his investors—a big … [Read more...] about We Dumped This 13% Dividend—Time To Reconsider?
High yield funds
Share to Twitter Share to Linkedin Honda's revamped Clarity fuel cell sedan is a technological marvel, but hydrogen fuel stations ... [+] remain scarce. (Honda) Honda The dogged persistence Honda has shown in its decades-long quest to perfect hydrogen as a zero-emission replacement for gasoline can be seen as quixotic or futile. But the quirky company that makes motorcycles, lawnmowers, jets, humanoid robots, boat engines and a few million cars soldiers on, along with GM, Toyota and Hyundai, in the face of haphazard government support for hydrogen, minimal consumer awareness and withering critics like Elon Musk , a tireless advocate for Tesla’s battery-powered cars. All the sweat equity Honda engineers have invested in its fuel cell program, year after year, has yielded a remarkable new version of the Clarity sedan, the most compelling argument yet for the potential hydrogen cars still hold. Yet for all its technological sophistication, … [Read more...] about Honda’s Dogged Hydrogen Push Yields A Remarkable New Clarity Fuel Cell Sedan
Share to Twitter Share to Linkedin Roughly 11 months ago marked the launch point for the Federal Reserve’s tightening cycle, adding over four full percentage points to its target for the Federal Funds rate since March 2022 to a current upper bound of 4.75%. Notably, the level is the highest for the benchmark since September 2007, with the pace of Fed tightening virtually unprecedented. No doubt, many think the Federal Reserve hiking the Fed Funds rate should be a big headwind for equities, but seven decades of returns data show that stocks in general have performed admirably on average, both concurrent with and subsequent to increases (as well as decreases) in the Fed Funds rate. This is the case over 3-, 6-, and 12-month time spans, with Value Stocks leading the charge no matter the direction. Anticipation of significantly tighter monetary policy spurred higher rates across the various maturities of the yield curve. Of course, moves back into … [Read more...] about 2023 Value Stock Picks: Fed Punching A Hole In The Punch Bowl
The budget managed to keep the focus intact on infrastructure, long-term capacity building, and much-needed tweaks to the taxation framework to optimise tax mobilisation. Given the needs of the Indian economy and the government’s previously outlined economic vision for the next 25 years, expectations were indeed high from Budget 2023. However, there were other realistic aspects like the lingering fiscal impact of COVID-19 relief measures, persisting global inflation in the last few quarters, rising interest rates and slowing economic growth, that kept the expectations in check. In such a situation, the Budget presented by the Finance Minister successfully tread the tightrope and checks all the right boxes. Most importantly, the Budget has affirmed the government’s resolve to stay on the fiscal consolidation course. Other than maintaining macroeconomic stability by operating within means, the budget managed to keep the focus intact on infrastructure, long-term capacity building, … [Read more...] about Tax changes in Budget 2023 to boost consumption & savings
Share to Twitter Share to Linkedin The U.K. financial system nearly broke this autumn when rising interest rates created a vicious circle of margin calls driving the stock market into free fall and with it a cycle of rising interest rates driving bond yields up causing further margin calls to the pension fund institutions. This kind of hidden danger is just what causes crashes. Pension funds had levered their government bond portfolios to the roof to reach for higher returns. Back in the day these same funds had been squeezed by the regulator out of stocks and into bonds so as not to add too much risk to their funds and get into exactly the vicious circle they now found themselves in by turning safe bonds into mountains of dangerous leverage. What irony! Well, not really. The thing is this, who is going to buy the bonds of a country up to its ears in debt with an out of whack fiscal deficit heading into a recession, let alone buy the bonds of a … [Read more...] about FTSE 100 Break Out Preempts Bank Of England Surrender To Inflation
Share to Twitter Share to Linkedin Key News Asian equities had a strong day following US stocks’ positive move yesterday, with the Philippines having a very strong day in advance of today’s Fed +25 bps rate hikes which will lead the European Central Bank (ECB) to raise rates +50bps, Bank of England (BOE) +50bps, and a whole host of other central banks doing the same tomorrow. Malaysia was closed for Federal Territory Day which celebrates "the formation of the Federal Territory of Kuala Lumpur in 1974” according to Google GOOG . President Xi attended and spoke at the CPC Central Committee which focused on “accelerating the construction of new development pattern” i.e., DOMESTIC CONSUMPTION. I took the artistic license of highlighting where investors should be focused i.e., DOMESTIC CONSUMPTION. The speech also focused on “self-reliance and self-improvement in science and technology”. This was front page news in China AFTER the market close. We are … [Read more...] about President Xi Addresses Domestic Consumption In Speech