Tuesday, March 07, 2006

A titanic shift in liquidity

Primer on my investment outlook

For my regular readers, you are well aware that I believe asset prices have gone up due to an explosion of liquidity recently. Nearly every major central bank has given money away a real interest rate that is negative or zero. Cheap money has been the tide that lifted all boats..
Thus, we have had a situation where EVERY asset class, bonds, stocks, commodities has gone up for nearly 3 years..
The tide has turned, as Mauldin describes well.
I'm looking for a final leg up to dispose of my positions. I have ended up with too many non-yield shares due to convertible note conversions.. And SGL is going to be redeemed in a few months..
In a few months I intend to be left with only CBH conv notes.. And maybe a re-investment in some other newer issuer at more compelling prices..


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