Bill Gross Channels the Death of Equities Article with Recent Letter

Bill Gross Channels the Death of Equities Article with Recent Letter

“Davidson” submits:

Bill Gross of PIMCO released his equivalent of the famous Businessweek headline, “Death of Equities” on Aug 13, 1979 this morning. Meanwhile, we have had very positive earnings surprises from Carlisle Companies, Inc. (NYSE:CSL), Caterpillar Inc. (NYSE:CAT), Flowserve Corporation (NYSE:FLS),  Precision Castparts Corp. (NYSE:PCP) and other basic capital goods companies the past few weeks. These are the companies which supply pumps, specially cast industrial manufacturing products, equipment for mining, construction and etc. These companies supply the basic goods producing equipment on which all of society depends. There is no slowdown visible. These companies have generally provided good forecasts for future Ind. Production, employment and GDP.

Keep the Faith! The economy by all measures remains on track.

Keep the Faith! The economy by all measures remains on track.

If one does not look into the details, called “Bottom Up”, of the economy and compare the results to the broad economic data, “Top Down”, one cannot capture the real economic trends. This is where many forecasting doom and gloom using single economic data points, single asset classes or single quarter earnings reports and ignore the rest fall into error.

There is much to like. CAT and FLS up sharply on good reports and good forecasts.

Yet the media, is as is its selective approach, has emphasized the negative.

History often repeats through rhyme, i.e. not precise but very close. Bill Gross I think has just repeated the Businessweek headline of 1979.

I’m sorry but whenever anyone tell me what is “going to happen” over the next decade…I tune them out and IMO they lose a TON (all) of credibility. In July 2002, Facebook Inc. (NASDAQ:FB) was not even an idea yet and it would be 3 more years before the iPhone had even begun to be planned (Apple Inc. (NASDAQ:AAPL)).. Not a single person on earth knows what the next decade will bring….for Bill Gross to assume he does is irresponsible and arrogance at it height. This is especially so when one considers how wrong he has been on Treasuries, TLT (his main focus) for the past three years…..

By: valueplays



About the Author

valueplays
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.