Economist's View: Sovereign Debt Risk
A good read via Mark Thoma about emerging market debt.
Without getting into whether the thesis is correct (because I don't think it matters) it is a great example of why moderation matters.
Emerging market debt is a great asset class, potentially, and there are funds that allow you to access it but just because it is easy to access does not mean you should access a lot of it.
A modest portion of your fixed income allocation? Sure. 40, 50% because you can get a high yield, that scream watchout for the future, or if you read the article it screams watchout for the near term.
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3 comments:
Roger, I came across yoru blog because of a google search for Vince Farrell. Your 12/07/04 post was spot on. What's up with this guy. I see him on TV all the time. He's been pushing the financials all the way down--especially BAC--- I really wonder how he qualifies as "expert". I'd like to see performance #'s next to these guys names whne they are offering commentary--kind of like baseball batting averages. Phil M.
http://themushroomfarm.blogspot.com/
Phil, not sure exactly what post you are referring to but I looked at the fund performance of funds his previous ran while her was CIO, or whatever his title was, and the funds did quite well.
My conclusion was that he wasn't really sharing all that much about stock selection.
That was a while and I don't know why he talks so much more about financials (my perception) than other sectors.
Roger
A little off topic but regarding fixed income allocation. Someone over on Minyanville mentioned getting a yield of 5.6% / year by buying PFE, then selling long dated calls and buying long dated puts on the stock to negate capital gain/loss. This assumes that PFE doesnt change the dividend. Have you ever done this? Any thoughts?
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