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Pimco Commodity Fund woes...

December 30 2005 at 4:53 PM
Kevin B 

 
Today they took a rather large drop. Upon further research I found the following article:

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BA42D4640%2D5350%2D4CA6%2D8A99%2D2E49EA58B3DA%7D

Any comment

 
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Re: Pimco Commodity Fund woes...

December 30 2005, 7:19 PM 

Kevin,

First of all, I guess if I owned it -- which I don’t -- I wouldn’t sell at this point. Pimco has some of the smartest people around. And maybe by June they’ll get it figured out and things will look better. But I would really pay close attention to what they are telling their shareholders in the meantime.

But the larger point is that there is a classic investment lesson here -- keep it simple and if you don’t know exactly what they’re investing in, avoid it. There is no telling what kind of complicated swaps and other derivatives Pimco was involved in and I’d be willing to bet that the great majority of shareholders had no idea what they had with this fund.

Commodities are some of the simplest investments around. There’s no reason to make it complicated.

Larry

 
 
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