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(P&I) DB Risk Confused & Confounded

February 18, 2014
Confusion & Confoundment

The Glide Path is a Flight Risk

Drama. These aren’t our grandfather’s markets and, of course, they never were. Pensions and social security are things of the post-war and now we have vast pools of money looking for early retirement and not enough bonds to go around.

The pension industry thinks that the only way to ensure adequate liquidity at the right time and in the right amounts – when the bill falls due – is to have government and high-grade corporate bonds in place so that they can clip their coupons on time, almost certainly, because somebody else is paying the bill (Investments Digest, February 13, 2014, Rising equities, low interest rates create split in derisking approaches).

But it doesn’t work like that and these Charts look like cash to us at the right time, in the right amounts, at any time. And they’re still “undervalued” and there’s not enough of them to go around either. Please Click on the Charts for more details.

The Undervalued Tobacco Companies The Undervalued US Airlines - January 2014 (B)(N) The Undervalued Big Tech - January 2014
The Undervalued Catch Of The Day - February 2014 The Undervalued Helen of Troy et al - February 2014 The "Undervalued" Canada Deal Book - February 2014
(B)(N) The "Undervalued" Defence Is Not An Option - February 2014 The Undervalued Canadian Banks & Insurance Companies - January 2014 The Undervalued Dow Utilities - January 2014
S&P 100 Undervalued Stocks - February 2014 The Cheapest Fastest Food In America - Risk Price Chart (B)(N) The Fairly-Valued Midstream Energy MLPs - February 2014

Global Mining - Risk Price Chart - February 2014

Just as important, however, is what we didn’t buy and they did. And as a result, the pension plans have developed a nasty habit of beggaring the pensioners and falling back on the pensioners-to-be and their sponsors for more money.

For more information on the chart elements and additional references to the theory, please see our Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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