Outside the Box

No Cuts, No Butts, No Coconuts

John Mauldin

September 4, 2006

The markets have been forced to digest a plethora of events over the past several years, ranging from continuous geopolitical turmoil to a new Fed chairman, from blowups like the Refco scandal to an inflated housing market, each of these occurrences has raised considerable coverage from the financial press yet one cannot lose sight of the longer term trends (and threats) that still loom. The most obvious, and potentially most significant, is the coming generational aging of the boomer generation and the subsequent healthcare conundrum.

This week's "Outside the Box" will feature an article by the widely proclaimed "Bond King," Bill Gross, on the impact of boomer retirement and what that means for healthcare, the workforce and social security. Many of you will find some of his comments controversial. I do not agree with his analysis on tax cuts, as an example. But he is right about the issues which will face us as a generation attempts to retire without having saved enough assets to do so, either as individuals or as a country.

My long term readers are familiar with Bill as he is a Managing Director at PIMCO. During his tenure there, he has become regarded as the most prominent figure in the fixed income sector while at the helm of the largest bond fund in the world, the PIMCO Total Return Fund. PIMCO is one of the largest specialty fixed income managers in the world, with more than $617 billion in assets under management and more than 800 employees in offices in Newport Beach, New York, Singapore, Tokyo, London, Sydney, Munich, Toronto and Hong Kong.

May you find value in Bill's "outside the box" commentary and enjoy a safe and fun-filled Labor Day.

John Mauldin, Editor
Outside the Box

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No Cuts, No Butts, No Coconuts
Investment Outlook

By Bill Gross, September 2006

Bathroom humor is always great fun to a fourth-grader and there's a little bit of that in the above that seems to have been passed down from generation to generation since...since...well ever since kids started standing in lines and needed to say something cool to maintain their place in them. I must confess that there have been lots of times when…

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