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Bloomberg: – Berkshire sells debt to buyers Buffett pities. – Berkshire Hathaway Inc.’s $1 billion note sale shows that while Chief Executive Officer Warren Buffett may pity investors who’ve stuck with bonds as yields fall to record lows, he’ll sell them as much debt as they want.
Indexuniverse: – The hottest Bernanke trade in ETFs. – Last week’s big bond ETF inflows makes you wonder just what institutions know about the Fed.
Bubble Bust Investing: – What to do with U.S. Treasuries. – In a recent interview with CNBC, legendary stock investor Warren Buffett had a clear and loud message about U.S. Treasuries: They are artificially priced, and investors can lose a great deal of money holding them at this point. Legendary bond investor Bill Gross seems to think otherwise. His $289 billion fund raised its U.S. Treasury holdings to 33 percent. Which side is right?
Learn Bonds: – Using Ray Dalio’s 5 principles to reach your investment goals. – Over the weekend I read through Ray Dalio’s principles, which is basically a guide to how to be happy and get things done. Ironically, the 123 page document written by one of the world’s best investors, doesn’t directly talk about investing at all. As one might imagine however, many of the principles outlined in the document are as relevant to successful investing as they are to success in your personal and professional life.
Bespoke Invest: – High yield, preferreds soar. – While high yield bonds and preferreds have been on big runs higher for quite a while now, it may surprise some to know that they’re still well below their highs from before the financial crisis.
Arthur Stein: – Are ETFs cheaper than mutual funds and does cheaper mean better? – Exchange Traded Funds (ETFs) are increasingly popular as an alternative to mutual funds. One often-cited reason is that ETF management fees are lower. But are ETF fees really lower and do lower fees result in better performance?
CFO: – Harrisburg: The city that couldn’t shoot straight? – If mayors of small cities and other municipal officials want to issue mountains of debt in the public markets, they had better be able to disclose their financials in a way the financial markets expect. That was the broader message that the Securities and Exchange Commission felt called upon to deliver in a special report along with its announcement of a settlement of fraud charges it brought against the City of Harrisburg, Pa.
FT: – Yield hunters spark junk bonds frenzy. – Global investors are venturing to the riskiest corners of the US corporate debt markets in greater numbers in a so-called dash for trash as the relentless search for higher yields shows no signs of abating.
Barron’s: – Gundlach: QE continues, short Chipotle & find a Taco truck. – Jeffrey Gundlach, CEO of DoubleLine , is better known for his expertise in bonds and fixed income, but he was long the artist Cezanne and gourmet tacos at the Sohn investing conference Wednesday, and made the case that low rates are here for awhile and Chipotle is overpriced.
FT: – EM borrowing costs tumble to record low. – Developing country borrowing costs have tumbled to a record low as asset managers have shied away from dollar-denominated debts and scrambled to buy local emerging market bonds that still offer attractive yields.
ETF Trends: – The actively managed ETF landscape. – While still only accounting for a fraction of the overall exchange traded fund space, actively managed funds have been quickly attracting new assets. According to AdvisorShares, actively managed U.S.-listed ETFs saw $3.6 billion in new asset inflows year-to-date through April 30, bringing active ETFs to $14.1 billion in assets under management.
Bloomberg: – JPMorgan leads companies borrowing $15.6 billion with bonds. – The biggest U.S. bank issued $2 billion of 1.625 percent, five-year notes at narrower relative yields than those on similar-maturity debt sold four months ago, according to data compiled by Bloomberg. A spread of 92 basis points more than similar-maturity Treasuries compares with an extra yield of 103 basis points for $1.25 billion of 1.8 percent, five-year debentures that New York-based JPMorgan sold Jan. 17.
Bloomberg: – Taxable bond sales double with penalty at 1994 low. – Localities from Florida to California are selling taxable bonds at the fastest pace in three years as the additional cost of issuing the debt instead of tax-free financing is near the lowest since 1994.
ETF Trends: – Two emerging market bond ETFs yielding 4%. – Emerging market bond exchange traded funds are presenting opportunity due to the low debt load most related economies have. They are selling at good discount rates, presenting opportunity for the coming years.
Bloomberg: – Columbus set to redeem up to $476 million of Build America bonds. – Ohio’s capital city is set to buy back at par as much as $476 million of Build America Bonds it sold in 2009 and 2010 as sequestration will cut the federal subsidies on the debt’s interest costs.
Barron’s: – The other shoe drops: Second key junk-bond yield index falls below 5%. – Yesterday it was the Barclays US High Yield Index falling to 4.97%, now the other widely followed market index, the Bank of America Merrill Lynch High Yield Master II Index, has fallen through the 5% floor for the first time too, closing last night at 4.99%, down from 5.005% a day earlier. That index’s average dollar price also rose to a fresh record high 107.21 cents on the dollar, up from 107.20 a day earlier, which had marked the first time the price had ever risen above 107.
So US Treasury will be issuing less paper than the Fed is buying in 2Q. Lower rates ahead?
— Cate Long (@cate_long) May 9, 2013