What's Your YTD Return?

[Whisper9999]

I'm up 17% in my cash broker account and up 7.3% in my IRA. (I invest short term in only the best of best NASDAQ stocks.)

 

[brewer12345]

Here is how I track my net worth, and I do it
compulsively.  I reach into the nearest wastebasket and find a piece of paper without printing/writing on one side.  It should be at least the size if a No. 10 envelope.  Then, I find a working pen or pencil.  I list all assets and subtract
any liabilities.   My net worth appears.
I don't save it anywhere cause I can do it again
anytime in 5 minutes

BTW, I continue to invest in long term bonds
including some junk, but this is all "forever" money.
I hate watching the NAV bounce around as interest rates change, but I need the income and CDs/MMs
ain't makin' it for me these days.

John Galt

JG, do yourself a favor and be careful with junk or low investment grade bonds. By all indications, these assets are historically overvalued, and sorely due for a correction. If you are on the wrong end of it, you will be sorry. Find something like a high yield CD instead and wait for junk yields to get more attractive.

 

[Whisper9999]

JG, do yourself a favor and be careful with junk or low investment grade bonds.  By all indications, these assets are historically overvalued, and sorely due for a correction.  If you are on the wrong end of it, you will be sorry.  Find something like a high yield CD instead and wait for junk yields to get more attractive.

Right. Just look at a chart of LQD. It's had quite a rise and is now flattening.

But there is some potentially good news: the economy is doing well, default rates are low (at least the last time I read about it) and corporate profits are pretty solid. This historically has been good for corporate bonds in general.

But I would definitely have my finger on the trigger and would pull it at any sign of a correction.

 

[Berkshire_Bull]

Michael Milkin, a man i just finished reading a biography of, felt that junk bonds were a very "undervalued" part of the investment spectrum... now granted he served some jail time : he was a genius, and allthough i haven't looked into it, junk bonds can go up, while compensating the owner for holding them, while the only way AAA bonds can go is down. it appeals to my "value investor" side, and maybe thats why its so appealing to me, maybe i'll invest in some junk bonds in the future..... hmmmmmm....

 

[brewer12345]

Right.  Just look at a chart of LQD.  It's had quite a rise and is now flattening.

But there is some potentially good news:  the economy is doing well, default rates are low (at least the last time I read about it) and corporate profits are pretty solid.  This historically has been good for corporate bonds in general.

But I would definitely have my finger on the trigger and would pull it at any sign of a correction.  

LQD is actually composed of investment grade corporates, not junk.

The problem is that spreads on junk/low investment grade debt have slipped to historically low levels as investors chase yield. Although the default rate has come down from 2002-2003 levels, it is still reasonably high, and the junk default rate is starting to creep up. Not the time to be in junk, IMO.

I don't mind taking additional calculated risk, but I want to be compensated for it.

 

[John Galt]

Hi brewer12345.......and that's why I have junk in my
bag of tricks. I am taking a calculated risk and I believe I am
being compensated accordingly. Free enterprise...........
you gotta love it.

John Galt

 

[Whisper9999]

LQD is actually composed of investment grade corporates, not junk.

Oops - you're right.  Sorry everyone.  You can go to www.etfconnect.com, type in "LQD" and see the grades of bonds that they have concentrated on.  You can see, though, that the great majority of their investment is in the lowest two investment grades.  Still not junk though...

Does anyone know if the junk yield is less than 4% below the corporate yield?  Isn't that a warning sign right there?  

How can one keep from getting stung with negative returns like the 1990's returned?  (In the early 90's they were yielding 30% returns and then the bust happened and they actually yielded very negative returns.)

 

[John Galt]

Hi Whisper. A couple of comments. First you meant to say "yielding less than 4% ABOVE the corporate yield"? (By corporate I assume you mean investment grade). Right?

Two ways you can be saved if the junk starts to
head south. Pick the right time to get out, or
(in the absense of default) hold to maturity.

John Galt

 

[Whisper9999]

Hi Whisper.  A couple of comments.  First you meant to say "yielding less than 4% ABOVE the corporate yield"?  (By corporate I assume you mean investment grade).  Right?

Two ways you can be saved if the junk starts to
head south.  Pick the right time to get out, or
(in the absense of default) hold to maturity.

John Galt

Yes, that's what I meant to say. I'm not doing too well...

Here's my q for you: I'm interested to know what will be your "trigger points" for pulling out? Do you have a fairly well-defined exit strategy?

 

[SDY888]

These numbers are from April 04, when everything is rebased to coincide with tax return time.

Property:
Overall: +13.25%
Excluding own Residence: +13.7%

Equities:
Major Index and Blue Chip Fund: + 44%
Aggressive Growth Fund: +80%

Child Education Fund: +10%

Cash savings increase of around 25%.

Overall net worth up by about 28%, YTD.

NB: Large part of the equities gains (and part of property gain) results from a VERY VERY LOW entry point into China/Hong Kong/Asian Markets between July 03 and May 04, both during and immediately following the last Asian financial market shakedown and the SARS outbreak.

Simon888

 

[ESRBob]

Simon,
Good on ya', mate!
Great returns.-- congrats.

I've a soft spot for emerging markets as, with proper timing, they can be real rocket for capital appreciation. 'Course then you get periods like 94-2000 where they just sit around (or wors, tank) and break your heart.

Now I am past the individual stocks and timing things, so I'm just going to have to ride it out with the indexes and big funds, but for the last two years they've been sweet. Won't last forever, though!

80% this year is really extraordinary. Well done!

ESRBob

 

[SDY888]

Bob,

You have hit the nail on the head, capital appeciation is our driver as we are only mid-30's (although to my neices that means ''Old!) and are both working. My big bet was on the Hong Kong market in the middle of 03, at the height of the SARS outbreak. 25% of our net worth went into HK real estate with another 15% into stocks.

If one wanted a classic case study of the ''Madness of Crowds'' along with an embodiment of Ben/Warren's "Mr. Market'' in Manic Depression than HK/Asia after SARS was it. The most egregiously underpriced but solid global companies could be bought - I took a very deep breath and repeated the Buffett mantra of ''Be greedy when others are fearful''. Got to keep an eye on the pendulum swinging the other way though.

Simon

 

[johnblake]

around 6.5%

current allocation ~ 55%/35%/10%

US Large Cap - 35.5%
US Mid Cap - 9%
Small Cap - 6%

International - 5%

Short Trm Invest Bnd - 14%
Int Muni Bnd - 19

REIT - 1%
long Bnd - 1%

Cash - 10%

 

[John Galt]

I am answering Whisper's queries (a bit late) about
my "trigger points" and "exit strategy" for my junk
bonds. Whisper, I do not get that sophisticated, but here is how I am looking at it. If CD rates come back
(at least 1% up on 5 year term), I would shift SOME
junk money into CDs, UNLESS my NAV had dropped too
far for me to stomach. In that case, I revert to the "forever" money idea and just cash my interest checks until the bonds mature or I expire, whichever comes first. The tricky part for me was deciding how much
"forever money" I needed. I have that pretty well fixed
now, so if the bond values plummet but I still get my
monthly checks, I should be fine. I tell you though,
it took some conversion in my thinking to accept that
my NAV could bounce around. I was used to CDs
where what you put in is always there. Couldn't stand
the puny rates though, and that's when I made the great leap into junk/near junk. So far it's been fine.

John Galt

 

[Whisper9999]

I am answering Whisper's queries (a bit late) about
my "trigger points" and "exit strategy" for my junk
bonds.  Whisper, I do not get that sophisticated, but here is how I am looking at it.  If CD rates come back
(at least 1% up on 5 year term),  I would shift SOME
junk money into CDs,  UNLESS my NAV had dropped too
far for me to stomach.  In that case, I revert to the "forever" money idea and just cash my interest checks until the bonds mature or I expire, whichever comes first.  The tricky part for me was deciding how much
"forever money" I needed.  I have that pretty well fixed
now, so if the bond values plummet but I still get my
monthly checks, I should be fine.  I tell you though,
it took some conversion in my thinking to accept that
my NAV could bounce around.  I was used to CDs
where what you put in is always there.  Couldn't stand
the puny rates though, and that's when I made the great leap into junk/near junk.  So far it's been fine.

John Galt

Makes sense. You mean the NAV of your mutual funds, right?

 

[John Galt]

HI Whisper. Yeah, or the market value of my individual
bonds.

John Galt

 

[ESRBob]

Bob,



If one wanted a classic case study of the ''Madness of Crowds'' along with an embodiment of Ben/Warren's "Mr. Market'' in Manic Depression than HK/Asia after SARS was it. The most egregiously underpriced but solid global companies could be bought - I took a very deep breath and repeated the Buffett mantra of ''Be greedy when others are fearful''. Got to keep an eye on the pendulum swinging the other way though.

Simon

I confess to having been mildlly and quite pleasantly surprised that SARS did not recur the following year -- just a one-season thing -- but you were obviously right on that one. Toronto was also pretty spooked at that time, and I have relatives (Chinese) in medicine (doctor father in law) who lives with us and was also concerned at the time as to what bugs were coming home with him from the clinic every day...

 

[Zipper]

All of Ontario was freaked out over SARS.

If it had spread to the general population, ER would have been the last of our worries!

 

[John Galt]

I posted this before so some poetic license please

I used to be 100% MMs/CDs except for my real estate.
Once rates had plummeted I took a deep breath and
went to bonds, various yields/ratings/venues, but a lot
of junk status stuff, relatively speaking.
I'd rather be in CDs.
The rates drove me away. Now, obviously companies
willing to pay 7% for money involve more risk than
say USA issued bonds. I still can't see any way
I can get hurt unless they default. I have my inflation
protection in real estate (bought right/good location/positive cash flow) and if I lost 100% of my bond money I still would not have to go back to work.

John Galt

 

[SDY888]

ESRBob / Zipper,

We were in Hong Kong throughout the SARS period (yes, complete with face masks). Setting the hysteria aside, statistically more people died of pneumonia than of SARS that year in Hong Kong . It was, however, the seemingly indiscriminate nature of the virus that worried people. Sadly, through the secretiveness of the Mainland Chinese Authorities in intially covering the whole thing up, the outbreak became far worse than it ever really should have been and unnecessary deaths occurred. Even more unfortunate is that it was frontline medical staff treating the ''first phase'' of patients that took the brunt.

But we have always had SARS, Asian Flu, Bird Flu, West Nile Virus, Ebola, TB, etc etc etc outbreaks around the world for as long as I can remember. The WHO is currently predicting 100 (One Hundred) million deaths worldwide due to Bird Flu over the coming years, but I don't see that as a driver for economic meltdown. Maybe a set-back or a stuttter, but not a collapse.

For the ones with a long enough horizon and sufficient faith in the region's eventual recovery, the SARS period provided an extraordinary buying opportunity.

BTW, Kudos to your Father-in-Law, ESRBob. All in the medical profession deserve our gratitude.

Simon888

 

[haha]

I posted this before so some poetic license please  
I have my inflation
protection in real estate (bought right/good location/positive cash flow) and if I lost 100% of my bond money I still would not have to go back to work.
John Galt

John, I cannot remember if you have disclosed your net worth. You have said that it is low. Yet you speak of having direct investments in real estate beyond your own house. In fact, I believe you once referred to owning an entire island.

Direct real estate investment in today's market, let alone owning islands, is not something that one usually associates with modest net worth.

What am I missing?

Mikey

 

[Jarhead*]

John, I cannot remember if you have disclosed your net worth. You have said that it is low. Yet you speak of having direct investments in real estate beyond your own house. In fact, I believe you once referred to owning an entire island.

Direct real estate investment in today's market, let alone owning islands, is not something that one usually associates with modest net worth.

What am I missing?

Mikey

Mikey:

Realize you were waiting for an answer for John Galt, but while that's forthcoming, I just wanted to make a comment.
What you are missing is a sense of humor, re: John G.
Anybody that has spent time on this board, that is not brain-dead, has been able to figure out that John G has flights of fantasy.
That being said, he comes up with sometimes entertaining posts, and I will admit to admiring his spirit.
No harm, no foul.
Regards, Jarhead

 

[haha]

Mikey:

Realize you were waiting for an answer for John Galt, but while that's forthcoming, I just wanted to make a comment.
What you are missing is a sense of humor, re: John G.
Anybody that has spent time on this board, that is not brain-dead, has been able to figure out that John G has flights of fantasy.
That being said, he comes up with sometimes entertaining posts, and I will admit to admiring his spirit.
No harm, no foul.
Regards, Jarhead

Jarhead--LOL John generally goes beyond my ability to suspend disbelief. But when I saw people asking him questions, and treating this whole odd scenario as if there might be some substance to it I got confused. I found myself wanting to own islands, wheel and deal in real estate, and have un-noticed treasures in my garage. All I have in my garage is mouse droppings, and they are easy to notice.

And have all this while paying no taxes, having no worries beyond the bubbles in my beer, and no book-keeping beyond a few old envelopes fished out of the trash.

After he explains all this to me, I also need his coaching to learn how to get a woman to go out to work, and still come home at night.

I guess some guys have all the luck.

Mikey

 

[soupcxan]

Based on all this, is JG the worst troll on the message board?

Or rather, the best?

Jarhead--LOL John generally goes beyond my ability to suspend disbelief. But when I saw people asking him questions, and treating this whole odd scenario as if there might be some substance to it I got confused. I found myself wanting to own islands, wheel and deal in real estate, and have un-noticed treasures in my garage. All I have in my garage is mouse droppings, and they are easy to notice.

And have all this while paying no taxes, having no worries beyond the bubbles in my beer, and no book-keeping beyond a few old envelopes fished out of the trash.

After he explains all this to me, I also need his coaching to learn how to get a woman to go out to work, and still come home at night.

I guess some guys have all the luck.

Mikey

 

[haha]

Based on all this, is JG the worst troll on the message board?

Or rather, the best?

I am pretty much a newbie at Troll-ology. TH was our expert on that, so I can't answer your question.

But JG is pretty good at whatever it is that he does.

Mikey