Comments on: Double Down Institutional Investing http://alephblog.com/2010/01/28/double-down-institutional-investing/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Sat, 31 Jul 2010 14:50:54 -0400 hourly 1 http://wordpress.org/?v=3.0 By: David Merkel http://alephblog.com/2010/01/28/double-down-institutional-investing/comment-page-1/#comment-24320 David Merkel Sun, 31 Jan 2010 05:42:57 +0000 http://alephblog.com/?p=2322#comment-24320 NC, I agree that SWIB and NJ are in separate spheres. Can you send any data on what SWIB is doing that I did not cite? As I wrote my article, it changed direction, and ended up being different than what I initially intended. Still, I would not pick now as a time to lever up bond investments. At present, that is a "playing for the last nickel" trade. November 2008 through March 2009, I banged the drum on corporates, especially high yield. Now is not the time to be taking risk in bonds. NC, I agree that SWIB and NJ are in separate spheres. Can you send any data on what SWIB is doing that I did not cite?

As I wrote my article, it changed direction, and ended up being different than what I initially intended. Still, I would not pick now as a time to lever up bond investments. At present, that is a “playing for the last nickel” trade. November 2008 through March 2009, I banged the drum on corporates, especially high yield. Now is not the time to be taking risk in bonds.

]]> By: Novice Commenter http://alephblog.com/2010/01/28/double-down-institutional-investing/comment-page-1/#comment-24313 Novice Commenter Sat, 30 Jan 2010 04:26:33 +0000 http://alephblog.com/?p=2322#comment-24313 My impression of this development is that SWIB is primarily trying to lengthen the duration of their portfolio to better match their obligations (re PP 3). It seems that they are looking to implement an LDI hybrid in order to match stated return goals while reducing equity exposure, although there is obviously credit risk here, pensions leaving equities is not a negative development in my mind. The fund mentioned in the article is not going full bore, (a phased strategy w/ 4% - 20% leverage implemented over a four-five year period) and is not offering POBs. From what I've read elsewhere (Pensions and Investments 1/11/10 ), this move is motivated more by accepting a decent ceiling on returns in exchange for reduced volatility w/in the asset/liability relationship (a paradigm pensions will accept to their benefit). I agree there are risks involved, but comparing SWIB to NJ putting out POBs that went directly into equities isn't very balanced. I don't mean to defend public pensions, CalPERS/State of NJ/IL are atrocious, but I think that this WSJ piece borders on sensationalism in that it doesn't give accurate coverage of the specifics of SWIBs strategy. As my name states, I am just a novice, so please tear this submission up. Regards, NC My impression of this development is that SWIB is primarily trying to lengthen the duration of their portfolio to better match their obligations (re PP 3). It seems that they are looking to implement an LDI hybrid in order to match stated return goals while reducing equity exposure, although there is obviously credit risk here, pensions leaving equities is not a negative development in my mind. The fund mentioned in the article is not going full bore, (a phased strategy w/ 4% – 20% leverage implemented over a four-five year period) and is not offering POBs. From what I’ve read elsewhere (Pensions and Investments 1/11/10 ), this move is motivated more by accepting a decent ceiling on returns in exchange for reduced volatility w/in the asset/liability relationship (a paradigm pensions will accept to their benefit). I agree there are risks involved, but comparing SWIB to NJ putting out POBs that went directly into equities isn’t very balanced. I don’t mean to defend public pensions, CalPERS/State of NJ/IL are atrocious, but I think that this WSJ piece borders on sensationalism in that it doesn’t give accurate coverage of the specifics of SWIBs strategy. As my name states, I am just a novice, so please tear this submission up. Regards, NC

]]> By: But What do I Know? http://alephblog.com/2010/01/28/double-down-institutional-investing/comment-page-1/#comment-24304 But What do I Know? Fri, 29 Jan 2010 12:46:30 +0000 http://alephblog.com/?p=2322#comment-24304 What's that saying--the only thing we learn from history is that we learn nothing from history. . . What’s that saying–the only thing we learn from history is that we learn nothing from history. . .

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