Your Thoughts On PIMCO Total Return?

[kyounge1956]

You are way overthinking this. We are not talking about some hotshot Wharton grad that had a good year or two, we are talking about the "Warren Buffet: of bonds, whose a permabear and eked out a 5% return in 2008. There's probably not many index bond funds that can say that...........

That's quite likely. I have tendencies in that direction. I just don't know yet if it would make any difference. If you are making muffins, it doesn't really much matter whether you use whole eggs or egg whites only. The recipe will work OK either way. But if you are making merengue, you cannot be so cavalier. You must use egg whites only, because even a tiny speck of yolk can cause the failure of the whole excercise. I just don't know yet whether a financial portfolio is more like muffins or merengue, and since I have to get it right the first time, I am inclined to stick to the recipe.

Just because there's nothing to worry about doesn't mean I don't get worried.

 

[tulak]

You are way overthinking this. We are not talking about some hotshot Wharton grad that had a good year or two, we are talking about the "Warren Buffet: of bonds, whose a permabear and eked out a 5% return in 2008. There's probably not many index bond funds that can say that...........

Vanguard Total Bond Market Index: 5.1% for 2008

VBMFX - Fund returns - MSN Money

 

[FinanceDude]

Vanguard Total Bond Market Index: 5.1% for 2008

VBMFX - Fund returns - MSN Money

I said NOT many, I DIDN'T say NOT ANY........

I never looked, how did Vanguard Total Market fund do?

 

[kyounge1956]

I said NOT many, I DIDN'T say NOT ANY........

I never looked, how did Vanguard Total Market fund do?

Ya mean VTSMX?

 

[Architect]

Correct. These guys are very good. Fearing a housing bubble they sent their team across the country to see what it's like locally - guess what they found? So they invested for a housing bubble.

Then they invested for a systemic crash. Unfortunately they kept out of Treasuries, and bought Fan/Fred, which ended up being OK instead of outstanding (had they stayed in Treasuries). You have to roll the dice ... but they still made good money.

I'm not aware of any year where they had a negative return, maybe they did one or two years. Usually it's 5%-10%.

You are way overthinking this. We are not talking about some hotshot Wharton grad that had a good year or two, we are talking about the "Warren Buffet: of bonds, whose a permabear and eked out a 5% return in 2008. There's probably not many index bond funds that can say that...........

 

[tulak]

Correct. These guys are very good. Fearing a housing bubble they sent their team across the country to see what it's like locally - guess what they found? So they invested for a housing bubble.

Then they invested for a systemic crash. Unfortunately they kept out of Treasuries, and bought Fan/Fred, which ended up being OK instead of outstanding (had they stayed in Treasuries). You have to roll the dice ... but they still made good money.

I'm not aware of any year where they had a negative return, maybe they did one or two years. Usually it's 5%-10%.

I looked at the 10 year returns for PTTRX and VBMFX and PTTRX returned about 1-2% more than VBMFX. In all years, PTTRX had higher returns than VBMFX, except for 2008 (an indication of things to come?).

I used to own PTTRX, but decided I didn't want a managed fund, so I went with VBMFX instead. Personal choice which I don't regret, but I can understand others preference with the managed fund. Looking at past performance, I can see the appeal, but then again, you never know what the future holds.

Charts:
PTTRX - Fund returns - MSN Money
VBMFX - Fund returns - MSN Money

Oh, and the last negative year for PTTRX was 1999: -0.3%.

 

[FinanceDude]

Correct. These guys are very good. Fearing a housing bubble they sent their team across the country to see what it's like locally - guess what they found? So they invested for a housing bubble.

Then they invested for a systemic crash. Unfortunately they kept out of Treasuries, and bought Fan/Fred, which ended up being OK instead of outstanding (had they stayed in Treasuries). You have to roll the dice ... but they still made good money.

I'm not aware of any year where they had a negative return, maybe they did one or two years. Usually it's 5%-10%.

I met him once at a conference. Truly a fascinating guy. Maybe buying equal amounts of Berkshire Hathaway and Harbor Fund would be the "balanced fund of the gods"...........

 

[ziggy29]

I looked at the 10 year returns for PTTRX and VBMFX and PTTRX returned about 1-2% more than VBMFX. In all years, PTTRX had higher returns than VBMFX, except for 2008 (an indication of things to come?).

I don't know that it's an indication of things to come, unless you think the Treasury bubble will continue to inflate. I suspect that's the reason why VBMFX "won" in 2008, albeit barely.