tag:blogger.com,1999:blog-5776375569387669394.post4048554073794206832..comments2023-10-19T10:43:38.825-04:00Comments on Free Advice: "A Savvy Bond Man Bets on Rising Inflation"Bob Murphyhttp://www.blogger.com/profile/04001108408649311528noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5776375569387669394.post-4913889864205111032010-01-06T17:30:22.915-05:002010-01-06T17:30:22.915-05:00Murphy - The following statement is a huge red fla...Murphy - The following statement is a huge red flag: <br /><br />"For two years Mr. Tedford's bond portfolio trailed its benchmark by as much as 1.2 percentage points—"a very painful period for us," he says.<br /><br />"The model was right about inflation, but the interaction between inflation and interest rates didn't follow the norms."<br /><br />What "norms?" There are no "norms" in the sense required by a working model. After a mere 20 years of luck Tedford's model no longer works as he expects it to...he should listen more closely to what it is telling him. Instead he clings to the past and we get the following:<br /><br />Nevertheless, he says the model "has been extraordinarily accurate in the last 20 years [and] is responsible for our track record against the benchmark."<br /><br />A very dangerous statement for a money manager. If you are relying on Tedford to support your inflation forecast, you may want to re-think your forecast.Efinancialnoreply@blogger.comtag:blogger.com,1999:blog-5776375569387669394.post-74366026679651153912010-01-05T18:45:00.734-05:002010-01-05T18:45:00.734-05:00Stuff about Peter Schiff.Stuff about Peter Schiff.obnoxious bozonoreply@blogger.com