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Notes to myself, possibly of interest to others.
-- Bill Northlich

Friday, August 12, 2011


[These days, it's] just not preferable to be in the sectors sensitive to global growth, especially in the developed world. For example, the agri-business is bound to receive a lift from the latest crop forecast cut from the Department of Agriculture, which has sent raw food prices (especially corn) back onto an upswing. See Food Commodity Prices Soar as U.S. Crop Forecast Cut on the front page of the FT. And now more than ever, a S.I.R.P (Safety and Income at a Reasonable Price) portfolio makes great sense, especially with the Fed taking away any policy rate risk for at least the next two years: high-quality bonds, high-yielding stocks in defensive areas of the market (ever heard of General Mills? It yields 3.5%, which is almost what you can garner from the long Treasury bond); preferreds; convertible bonds; REITs (expensive, but they carry an average yield of 4.4%). We may be heading for a recession, but cash is still trash at 0%. There’s a clear difference between capital preservation and a bunker mentality.

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