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Post by anitya on Mar 22, 2023 1:18:02 GMT
chang, Why would any fund manager own CoCos? Many funds have managed distribution mandates and CoCos help meet the target. If I recall correctly, even PIMIX used to have (or has?) a managed distribution policy. I do not think any fund with a strict bond investment mandate would own these but fixed income funds with some flexibility to dip into preferreds / equity do. Both multi-sector fixed income and preferred CEFs own CoCos - in case you want to check if what you own has these. Not sure Subprime AAA tranche holders ever lost money if they did not panic and sell. CoCos are not even like a subprime BB tranche. I made tons of money on subprime rMBS but owned CoCo owning funds for a much shorter time period to make as much money off of them. I am having second thoughts on actively managed mutual funds. Here is an example - Grandeur Peak US Stalwart fund had First Republic and SVB at 4.6% and 2.3%, respectively, of the portfolio as of Oct 31, 2022. It first bought them in April 2020 (fund inception) and added more as recently as October 31, 2022. So, this month the fund NAV has dropped more than 10% while growth stocks have done well. I do not want to sound like I judge a fund manager only by total return. I do not mind if a fund does not even beat its bench mark / category if he does everything right and just does not get lucky on his timing but owning and adding SVB after it has filed its 2021 10K has no excuse. I think buy and hold will become less and less popular. I expect elevated market volatility to be the norm. May be I will try actively managed ETFs that disclose their holdings daily. At least the managers do not get to hide behind time lags. P.S.: I will continue to be a buy and holder of PRWCX, as long as the current manager continues.
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Post by bobfl on Mar 22, 2023 13:24:35 GMT
Why would any fund manager own CoCos? ....... Excellent post! So many guardrails that proved very weak. 1. Regulators 2. Rating Agencies 3. Company management 4. The basic belief to "trust the advisor" I saw the same issues in 2008. But the forced "reach for yield" and the forced need to stay almost fully invested are also issues.
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Post by chang on Mar 22, 2023 14:46:54 GMT
anitya “Many funds have managed distribution mandates and CoCos help meet the target.” I get it, but speaking for myself only, I would never own an asset with a managed distribution mandate. That’s giving your money to someone who is forced to be stupid if he has to. That approach just doesn’t fit well with me. The consequences could range from senseless ROC to … what we just saw. Anybody know if PIMIX held worthless CS bonds?
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Post by Norbert on Mar 22, 2023 15:47:31 GMT
chang , Not exactly, but know that total Swiss holdings were 0.78% of portfolio as of December.
Wait, I found the PIMIX details. About $800M in CS bonds, 0.68% of portfolio.
Peanuts, in other words.
INVESTMENTS IN SECURITIES LOAN PARTICIPATIONS AND ASSIGNMENTS CORPORATE BONDS & NOTES BANKING & FINANCE Credit Suisse AG 2.984% 09/01/2023 € 6,800,000 7,156,623 0.006% Credit Suisse AG 6.500% 08/08/2023 $ 53,492,000 51,925,005 0.046% Credit Suisse Group AG 0.625% 01/18/2033 € 12,700,000 7,574,156 0.007% Credit Suisse Group AG 0.650% 09/10/2029 € 3,900,000 2,805,235 0.003% Credit Suisse Group AG 2.875% 04/02/2032 € 11,000,000 8,543,546 0.008% Credit Suisse Group AG 3.091% 05/14/2032 $ 110,535,000 76,594,363 0.069% Credit Suisse Group AG 3.869% 01/12/2029 $ 2,400,000 1,927,222 0.002% Credit Suisse Group AG 4.194% 04/01/2031 $ 20,069,000 15,618,024 0.014% Credit Suisse Group AG 5.250% 02/11/2027 $ 17,510,000 11,437,208 0.010% Credit Suisse Group AG 6.250% 12/18/2024 $ 1,550,000 1,221,978 0.001% Credit Suisse Group AG 6.373% 07/15/2026 $ 65,500,000 61,552,880 0.055% Credit Suisse Group AG 6.375% 08/21/2026 $ 25,350,000 18,230,895 0.016% Credit Suisse Group AG 6.442% 08/11/2028 $ 149,385,000 136,263,549 0.122% Credit Suisse Group AG 6.537% 08/12/2033 $ 205,550,000 180,862,208 0.162% Credit Suisse Group AG 7.250% 09/12/2025 $ 21,940,000 15,775,045 0.014% Credit Suisse Group AG 7.500% 07/17/2023 $ 75,089,000 60,192,821 0.054% Credit Suisse Group AG 7.500% 12/11/2023 $ 101,657,000 89,051,532 0.079% Credit Suisse Group AG 9.016% 11/15/2033 $ 22,200,000 22,791,624 0.020%
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Post by Chahta on Mar 22, 2023 16:51:23 GMT
PIMIX has a perfect trifecta....CS, Argentina and Puerto Rico bonds.
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Post by bobfl on Mar 22, 2023 17:02:02 GMT
That’s giving your money to someone who is forced to be stupid if he has to. Well said!!! And as an investor, how many people examine the holdings.
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Post by uncleharley on Mar 22, 2023 17:03:27 GMT
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Post by bobfl on Mar 22, 2023 20:20:01 GMT
Looks like the author failed to read the chart. USB is a super regional and is nowhere near SIVB, SBNY and FRC on the chart. On the chart he places USB way above the median line and then has to draw a line down to get to the actual dot under the line. Time will tell. Is it the banks or is it Burry? I remember Meredith Whitney. She got one call right, was believed to be a god, then fell from grace hard. Wall Street Journal said, "Meredith Whitney catapulted to fame after her prescient report on Citigroup—but the accolades later turned to schadenfreude." So thanks for the heads up, but we must keep an eye on Burry as much as the two banks mentioned. PS. Shorting specialists, like Burry want to drive stock prices down. He could be right; he could be wrong. I prefer to listen to Mike Mayo.
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bd1
Ensign
Posts: 20
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Post by bd1 on Mar 22, 2023 22:48:47 GMT
Well, if you count Russia debt, it is a quadfecta.
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Post by FD1000 on Mar 22, 2023 23:03:35 GMT
I don't know who is right/wrong, but a simple chart says KRE=reginal banks, KBE=Bank, USB=Bancorp stink compared to the "stupid" index SPY...and today was no difference. Attachments:
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Post by anitya on Mar 23, 2023 4:53:46 GMT
chang , I have been out of PIMIX since Jan 2021 and would have been out a few months before if I was not trying to push cap gains into 2021. I know it started doing ROC in March / April 2020 when I bought it again. I fully expected it to own CS bonds as it has "income" in its name. I have not studied the CS Bail in but thought only CoCos were screwed which are equity anyway (Tier 1 Capital!) - I did not think CS bonds were stiffed. Question is whether PTTRX, MWTRX, and other large AUM total return bond funds, with higher capital preservation expectation, own CS or not. PSA: It is a wild world out there. Unfortunately, the saying, "Nobody takes care of your money or your kids like you do" is so true. You still have to keep an eye on the service provider. Also, people need to be careful what information they take in (more important than what food they eat). Even well known financial media like CNBC, WSJ, Bloomy, etc. spread a lot of misinformation in their zeal to be the first to break a story or just not to be left behind, especially when events are developing fast. Some hosts of these channels are spewing misinformation even today about the events of March 12 - you would think in 10 days they would get caught up. Even guests on these TV shows - some whom I think highly of - have been the source of misinformation. Posters in the forum, ask each other a lot of questions to gain better understanding and not rely just on what you read or watch on TV / media. A
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Post by Norbert on Mar 23, 2023 8:21:22 GMT
chang , I have been out of PIMIX since Jan 2021 and would have been out a few months before if I was not trying to push cap gains into 2021. I know it started doing ROC in March / April 2020 when I bought it again. I fully expected it to own CS bonds as it has "income" in its name. I have not studied the CS Bail in but thought only CoCos were screwed which are equity anyway (Tier 1 Capital!) - I did not think CS bonds were stiffed. Question is whether PTTRX, MWTRX, and other large AUM total return bond funds, with higher capital preservation expectation, own CS or not. PSA: It is a wild world out there. Unfortunately, the saying, "Nobody takes care of your money or your kids like you do" is so true. You still have to keep an eye on the service provider. Also, people need to be careful what information they take in (more important than what food they eat). Even well known financial media like CNBC, WSJ, Bloomy, etc. spread a lot of misinformation in their zeal to be the first to break a story or just not to be left behind, especially when events are developing fast. Some hosts of these channels are spewing misinformation even today about the events of March 12 - you would think in 10 days they would get caught up. Even guests on these TV shows - some whom I think highly of - have been the source of misinformation. Posters in the forum, ask each other a lot of questions to gain better understanding and not rely just on what you read or watch on TV / media.
Speaking of "misinformation", let's compare the actual performance of PTTRX, MWTRX, and PIMIX.
(Click to enlarge):
PIMIX has achieved higher returns and lower drawdowns than PTTRX and MWTRX since 2008, despite taking on some risky credit. It appears that these two funds do not do a better job of capital preservation, as you say we might expect.
Credit risk is not the only type of risk that bonds and bond funds are exposed to.
And I will continue to focus on the food I eat. In terms of life expectancy, it's a top priority. Occasionally getting blindsided by CNBC or Bloomberg will not kill me (though it might make me poorer).
Hopefully you didn't just figure out that we can't take what the Talking Heads say for granted; nor what we read on the Internet? There's an active thread about Cramer on Big Bang ...
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Post by Fearchar on Mar 23, 2023 10:01:53 GMT
And I will continue to focus on the food I eat. In terms of life expectancy, it's a top priority.
For sure! Fasting is also important (strongest science). Keep insulin level low.
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Post by chang on Apr 14, 2023 12:50:16 GMT
I see that UBS has nearly recovered its sharp loss from the CS failure, and is nearly back to its all time high. I wish I’d added on the dip, because this was a classic dip. I have a reasonably fair position. Sadly, it pays a lower dividend (2.63%) compared to my other banks, JPM (3.10%) and ING (3.89%).
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Post by chang on Apr 14, 2023 16:20:15 GMT
Nice jump for JPM this morning!
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Post by uncleharley on Apr 14, 2023 17:20:40 GMT
The Big Banks seem to be doing well with the "crisis". Hopefully the regionals are also.
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Post by chang on May 1, 2023 13:11:32 GMT
Nice jump for JPM this morning! Another nice jump in the pre-market! I have a small position in JPM, one of my four US stocks I own in taxable. I was foolish not to have bought more last Fall when it flirted wth $100.
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Post by chang on Aug 31, 2023 10:23:43 GMT
I see that UBS has nearly recovered its sharp loss from the CS failure, and is nearly back to its all time high. I wish I’d added on the dip, because this was a classic dip. I have a reasonably fair position. Sadly, it pays a lower dividend (2.63%) compared to my other banks, JPM (3.10%) and ING (3.89%). Six months on from the Credit Suisse failure, UBS has done well. Up 14% in the last six months. Yield is well below what other banks pay, but it was a good buy, and a Swiss bank seems like a safe holding. (Well, it used to.) finance.yahoo.com/quote/UBSG.SW?p=UBSG.SW
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