Outside the Box

Secrets

John Mauldin

December 5, 2005

Whether short term rates are high today is one of the louder debates among economists. And why are long rates so low? Will an inverted yield curve mean what it has for the past 40 years, i.e., a slowdown and/or a recession?

This week's letter is a recent essay by Bill Gross, the Managing Director of Pimco, also known as the Bond King. Gross sits on top of the largest pile of bonds in the world. He thinks short term rates are high and nearing a peak for this cycle and that the economy will begin to slow down next year. He includes the main points, sent to their investment committee, which Pimco is looking at when viewing the bond market.

Will he be correct in his assessment of rates? When someone as large as Pimco offers their view of the market, we should keep an eye on them and that is why this was picked for Outside the Box.

John Mauldin, Editor
Outside the Box

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Secrets

By Bill Gross, December 2005

Investment Outlook

"The secret to success is to know something nobody else knows."
- Aristotle Onassis

Golf is an eternal conflict between elation and despair. My favorite response to Sue's perfunctory "How'd you shoot?" upon returning home after a decent Saturday afternoon's round is a rousing "I think I found the secret!" Inevitably the next weekend's retort is a hopeless "I think I lost it." Secrets…

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