<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="David Rosenberg ” data-reactid=”18″>David Rosenberg
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Rosenberg is an economist and consultant. What he views as the biggest risk is employment going down and consumers following the rest of the economy into the tank. That will spur the Fed to cut rates (though there’s not much room left to cut). Given that dynamic, he likes long bonds. ” data-reactid=”19″>Rosenberg is an economist and consultant. What he views as the biggest risk is employment going down and consumers following the rest of the economy into the tank. That will spur the Fed to cut rates (though there’s not much room left to cut). Given that dynamic, he likes long bonds.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Danielle DiMartino Booth” data-reactid=”20″>Danielle DiMartino Booth
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="DiMartino Booth of Quill Intelligence is slightly less negative in the near term and believes a Fed hike could re-enter discussions. Consequently, she sees an opportunity to short bonds. ” data-reactid=”21″>DiMartino Booth of Quill Intelligence is slightly less negative in the near term and believes a Fed hike could re-enter discussions. Consequently, she sees an opportunity to short bonds.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Steven Romick (Trades, Portfolio) ” data-reactid=”22″>Steven Romick (Trades, Portfolio)
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Romick of First Pacific thinks the high yield market is especially curious. High yield is filled with risks. Stocks are much harder to judge because your future returns are all a matter of debate. With bonds, the possible returns are clear. Stocks are much harder to judge, but likely the margin of safety isn’t there. In investment-grade duration went up to eight years. In the market, debt to EBITDA is higher than ever while EBITDA coverage is lower than ever outside of recessions. Inflation is not necessary to upset this apple cart. ” data-reactid=”23″>Romick of First Pacific thinks the high yield market is especially curious. High yield is filled with risks. Stocks are much harder to judge because your future returns are all a matter of debate. With bonds, the possible returns are clear. Stocks are much harder to judge, but likely the margin of safety isn’t there. In investment-grade duration went up to eight years. In the market, debt to EBITDA is higher than ever while EBITDA coverage is lower than ever outside of recessions. Inflation is not necessary to upset this apple cart.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There are high yield trades that Romick really likes because of the asymmetry. With some companies, you can go long the secured bonds and short high yield bonds of the same company against them with a positive carry because of the short rebate. Companies he likes for this strategy include Western Digital (WDC), Penn national gaming (PENN) and Gray Television (GDN).” data-reactid=”24″>There are high yield trades that Romick really likes because of the asymmetry. With some companies, you can go long the secured bonds and short high yield bonds of the same company against them with a positive carry because of the short rebate. Companies he likes for this strategy include Western Digital (WDC), Penn national gaming (PENN) and Gray Television (GDN).
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="James Bianco ” data-reactid=”25″>James Bianco
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Bianco sees a lot of political risk for the markets and warns not to count out Bernie Sanders. He’s of the opinion that there are a lot of political risks in this market, so he likes to be long bonds. The 10 year could go to 1.5%, and a recession is not necessary for that to happen. ” data-reactid=”26″>Bianco sees a lot of political risk for the markets and warns not to count out Bernie Sanders. He’s of the opinion that there are a lot of political risks in this market, so he likes to be long bonds. The 10 year could go to 1.5%, and a recession is not necessary for that to happen.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Edward Hyman – Evercore” data-reactid=”27″>Edward Hyman – Evercore
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Hyman also sees a lot of political risk around the election. The Middle East will continue to be a problem for 3-4 months, and China is also a problem. He thinks that people turn even more bullish at the end of bull markets as the market goes from fear to greed. Hyman thinks we are in the middle of that process.” data-reactid=”28″>Hyman also sees a lot of political risk around the election. The Middle East will continue to be a problem for 3-4 months, and China is also a problem. He thinks that people turn even more bullish at the end of bull markets as the market goes from fear to greed. Hyman thinks we are in the middle of that process.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jeffrey Gundlach” data-reactid=”29″>Jeffrey Gundlach
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Gundlach believes Double B junk bonds are unbelievably expensive. This class of junk bonds is as unattractive as he has seen it in his career. His primary message is to sell double B and buy the S&P 500 (SPY).” data-reactid=”30″>Gundlach believes Double B junk bonds are unbelievably expensive. This class of junk bonds is as unattractive as he has seen it in his career. His primary message is to sell double B and buy the S&P 500 (SPY).
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The risks are about the same but the rewards are pretty different. Gundlach also believes oil-related price gains are likely. Like the other commentators, he views Bernie as stronger than people think. He also expects a weaker dollar and stronger gold, and recommends going long on emerging markets.” data-reactid=”31″>The risks are about the same but the rewards are pretty different. Gundlach also believes oil-related price gains are likely. Like the other commentators, he views Bernie as stronger than people think. He also expects a weaker dollar and stronger gold, and recommends going long on emerging markets.
You can watch the full video here.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Disclosure: no positions” data-reactid=”33″>Disclosure: no positions
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more here:” data-reactid=”34″>Read more here:
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article first appeared on GuruFocus.
” data-reactid=”41″>This article first appeared on GuruFocus.
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