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In another forum, someone who knows nothing worth knowing about investing is touting Venezuelan bonds, which have had a good run up recently over news of Chavez’s surgery (and, probably, other factors like US dollar strength and the price of oil). The issue mentioned in a Bloomberg article is the 9.25’s of ’27, which are currently bid around 101, which is up just a tad bit from where I bought at 73.

The hassle with buying Venezuela’s debt is that you can’t get T&S. You can pull the Moody’s report. But you can’t really get a good sense of how the bond is being traded unless you hand-chart prices, which few investors do any more. Also, though the issue doesn’t carry the worst of ratings, this stuff clearly has to be bought in the proper size: enough to make a difference to overall portfolio returns, but not so much that likely losses are unsustainable. So most investors really would be better off accessing the debt though a fund, and no one would be well-served by chasing prices at these elevated levels. That’s what those who know nothing worth knowing about investing always forget. They look in the rear-view mirror, see fabulous returns, and think that those returns will persist. They might, or they might not. That’s the risk of rear-view investing. “Will past performance repeat itself?”

If you were prudent enough, shrewd enough, foresightful enough, or brave enough to buy a bit of Venezuela’s debt when it should have been bought, then congratulate yourself. But don’t add to the position, nor --heaven forbid-- initiate a new one. There’s better risk-adjusted opportunities out there in bond land than anything the financial press is currently talking about.

Charlie
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No. of Recommendations: 16
In another forum, someone who knows nothing worth knowing about investing is touting Venezuelan bonds...

Actually, in that other forum someone who knows a great deal about investing was making a point about the crazy volatility of Venezuelan bonds, not touting them at all, and Charlie misinterpreted his post.
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No. of Recommendations: 2
RH, Sir.

There is a vast difference between knowing lots of things about a subject, and knowing what is worth knowing. That individual fails to understand basic bond terminology and concepts, but he wants to tout their difficulties. Well, yes, bond investing can be challenging if you don't know what you're doing. His dismissive comments of Maduro --Chavez's likely replacement-- as "a former bus driver" characterize his shallow understanding of what is important. I'll stand by my judgement that "he knows nothing worth knowing about investing". Others will disagree, of course. But how successful are they themselves at pulling more money out of markets than they bring to them on an after-taxes, after-inflation basis?

The median non-home net-worth (in 2010 dollars) in this country is a mere $10,000. You do understand, don't you, what 'median' means? If you don't, I'll translate it for you. The 'average investor' fails to have enough money under management to ever become a competent participant in whatever markets they choose to pursue. It is Catch-22 situation. They can't invest effectively, because their lack of good judgement about what is worth knowing prevents them from gaining the money they need to gain experience that could become the basis of good judgment. So they chatter on the sidelines. Let me ask you this. Did you buy a judicious portion of Venezuela's debt when it should have been bought (as I did) and are now sitting on a fat profit and/or a fat income stream? Or, as is more likely, are you merely a fixed-income bench warmer?

If you can't tell who in the various forums knows what they are doing, as opposed to who has nothing of worth to offer, then I pity you. You read what I write, but you fail to understand it. Why not put me on your "Ignore" list and, instead, follow those who will merely tell you what you want to hear? Do you read my posts to make yourself feel good, or to become good? Why do I run riffs to hostile audiences? Certainly not for confirmation or affirmation of my ideas. (That's what markets are for.) But to gain insight into what the little people are thinking. They are they 'dumb money' against whom I'm trading. They are 'poor investors' in several senses of that term, and they are who I was once as well until I realized that what I was being told by them about inverting didn't work. Most people will never obtain investing success because they lack the courage to challenge the conventional wisdoms, or they fear offending the feelings of others. Investing isn't a group sport in which success comes from being a "team player". Success comes from following one's own path wherever it leads, never mind that no one else --but your growing bank account-- understands you.

Do you want to be well liked, or well paid? Choose carefully.

Charlie
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No. of Recommendations: 6
Do you want to be well liked, or well paid? Choose carefully.

Charlie

nothing is an either/or solution in life.....you should have learnt that a long time ago......besides who has more money is not the point.....who is well liked is not the point.....the point was you misinterpreted someone else's words to your liking again......and of course that meant the other guy was automatically an idjot......again....

Dave
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