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December 10, 2005
The best of Wall Street, Sat., Dec. 10, 2005, 12:47 PM
If there are two Wall Street strategists worth listening to, that would be Tom McManus and Don Coxe. And I have recommended both earlier in this blog.
Don Coxe is Chairman and Chief Strategist of Harris Investment Management, and Chairman of Jones Heward Investments, which are wholly-owned subsidiaries of the Bank of Montreal.
Tom McManus is Chief Investment Strategist For Bank of America Securities.
Not surprisingly, my position is very close to theirs " with the one exception that Stockman points out re Coxe.
But given that my position is that traders don't need the "advice" of Wall Street broker-dealers, and are much better off without their conflicts of interest, I prefer to take my own counsel, and manage my own portfolio.
Given that I decided to take the day off, I thought I'd leave you with a taste of Coxe. Although dated (Nov-16), the Dow has moved up just +90 points from the release date of this document.
I admire and envy Don Coxe. I admire his writing style, and I envy the editors he has to help him, as well as the $25 billion he manages.
Posted by Posted by Bill Cara on December 10, 2005 12:47:50 PM | Category: Cara Investment Reports
Discourse
bill,
For my education. What does Mr. Coxe mean by very long treasury zeros? Im thinking T-bills, and by very long he means one year. Is there something else that I am missing?
Thanks in advance.
Andrew
Posted by: Andy ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
December 10, 2005 4:29 PM [link]
Andy- When Coxe speaks of long dated treasury zeroes he is speaking of Treasury Strips, or zero coupon bonds. Long is referring to the back end of the curve (15+ years). Note he is recommending this as 'insurance' in the event of an economic downturn. You can also see in the full article that though he is bullish on commodities he does not see the inflation threat that many do. This, I believe is in direct contrast to Bill's view at this time.
All- Note Coxe discussion of the cause of M3's growth. IF (!) he is correct the implication is that M3 growth would contract sharply after 12/31st. If that were the case any gold-bull-come-lately (based on the rapid rise in M3) could be hitting the eject button on future data. As gold is overbought and after Jan 15th or so would be entering a seasonally weak period this could create a better entry point to add gold exposure in Feb 2006.
Posted by: stockman at
December 10, 2005 4:55 PM [link]
Put recommendations by Coxe and BCA in perspective. They are both putting out a contrary view of the bond play at this point in time. BUT their audience is primarily institutional, professioanl and sophisticated (I can't even spell it!) investors. Most of these individual entities would have a portfolio to consider, and this 'hedge' of long dated treasuries insures against A risk (recession) to those other positions.
Posted by: stockman at
December 10, 2005 5:05 PM [link]
On the subject of expert opinion, "You can learn things by listening to experts — often, they'll introduce you to important information you hadn't known about — but be very leery of their conclusions. As Lampert says, many of them are paid to have very strong and interesting opinions, no matter how blockheaded those opinions turn out to be."
http://abnormalreturns.wordpress.com/2005/12/07/wisdom-from-lampert-and-munger/
Posted by: stockman at
December 10, 2005 5:34 PM [link]
Stockman
Thanks for answering my question and for the additional information.
Andrew
Posted by: Andy at
December 10, 2005 7:07 PM [link]
Bill....with regard to Don Coxe, I too have a lot of respect for his analysis and commentary. You can listen to his weekly Friday commentary at: http://www.jonesheward.com/Commentary/p_Commentary.aspx
davpac
Posted by: davpac![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
December 10, 2005 3:24 PM [link]