Monday, October 30, 2006

Plan for next week

It has been a terribly busy week, so I apologize for the lack of posts. Depending on my schedule over the next few days expect to see some new posts on new topics. As always readers are invited to comment, and I'll do my best to respond.

  • Continuing my series on fixed income investments, by talking about TIPS and then moving on to more exotic fixed income securities. I see TIPS as one of the best investments contra recession, especially a stagflationry recession.
  • Just to recap: part 1 of the series was on why bonds are important, and Part 2 was on Bond ETFs. So far we have concluded that the Lehman Aggregate ETF (AGG) is the quickest, easiest way to add bond exposure to a portfolio.
  • The great Douglas Emmett (DEI) IPO of 2006. This IPO raised 1.4 billion dollars, about $300 million more than expected. The underwriters increased the offering to 66 million shares and priced at upper range of $21 a share. DEI opened trading at $23.75. I have several opinions about this IPO, but mainly I think it is yet another a sign of a potential top in the BIGREIT sector (ICF). Large equity REITs have had a huge run up in value. The Douglas Emmett IPO is in the opposite direction of recent private equity takedowns of publicly traded REITS.
  • Some thoughts on developing high performance socially responsible indexes. A way must be found to counteract the persistent large growth and glamour biases that sap Socially responsible investment SRI returns.


At October 30, 2006 10:10 AM, Anonymous Alligator Investor said...

I respect your work and always learn something from reading your posts. However, I disagree with you about AGG. LQD has a higher yield and a lower expense ratio than AGG, and in the last four months it has also shown greater relative strength.

At October 30, 2006 1:12 PM, Anonymous Market Participant said...

That's because LQD has a longer duration (i.e it is more interest rate sensitive) and it has more exposure to credit risk than AGG.


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