Comments on Fund My Mutual Fund: Bookkeeping: New Position in PIMCO Strategic Globa...

Yes, on MGF and RCS, I see your point that mean re...

2008-11-02T18:59:00.000-05:00

Yes, on MGF and RCS, I see your point that mean reversion for ETFs should be measured against their historical premium/discount rather than against zero discount to NAV - zero can be viewed as just an arbitrary line. I did buy some MGF at the beginning of October, when everything was starting to go nuclear. 7%+ for govt AAA bonds seemed like a good place to stash some cash. RCS seems like a good play on that too. One could probably rotate between the two of them as they fluctuate up and down relative to each other.

On TIPs, I agree with you that the government cheats on CPI, but isn't inflation just as relevant to regualar bonds as to TIPs? So when TIPs are so cheap compared to Treasuries they seem like a good idea. Forsyth's column in Barron's this week has some additional analyis on TIPs.

-nam

Interesting choice.. Although there is a lot of ta...

2008-10-31T17:26:00.000-04:00

Interesting choice.. Although there is a lot of talk lately about moving to dividend paying stocks, funds and ETFs.

One thing I've noticed lately is that **everything** I look at either seems to parallel or move inverse to the dollar. When the dollar goes up, oil and the markets seem to drop and vice-versa. (As a result, I've been running scans looking for low Beta stocks in hopes of finding something moving up irrespective of this function).

For a laugh, I pulled up Yahoo Finance/charts and plugged in RCS and overlaid UDN (Inverse dollar). Aside from spikes around the monthly dividend, it seems to be a parallel over the last year.

So, aside from the dividend gain, I presume you expect the dollar to reverse?

jegan

Too early for TIPS - they are based on lousy US go...

2008-10-31T14:54:00.000-04:00

Too early for TIPS - they are based on lousy US governments CPI measures which are a farce.

As for MGF, well there are like 5000 of these darn closed end funds/ETFs and I only had time to get through about 2000.

That one looks very similar but 1%+ less yield and while it trades at a discount to NAV it really is no different than RCSs spread. It is now trading at around -12 and over the past year has been in the -2 to -10 range. RCS is +10 for something that is typically in +5 to +20 range. So either could improve 10 points - and no one knows which will do it. Plus I get the extra 1%+ of yield, but its a very similar vehicle and certainly yours could outperform the one I chose. Do you own it? THis is new stuff for me after 20 years - never touch this sort of stuff normally but 8.5% with potential for more isn't bad even in a normal year.

Mark, Very interesting that you are looking at hig...

2008-10-31T14:36:00.000-04:00

Mark,

Very interesting that you are looking at high quality debt now! Have you considered TIPS? Their yield over inflation is at an all time high now.

Mark, Why RCS and not MGF? They hold pretty much...

2008-10-31T14:22:00.000-04:00

Mark, Why RCS and not MGF? They hold pretty much the same stuff, but MGF has lower fees and trades at a slight discount compared to RCS's 17% premium.