What a Steadfast Contrarian Says Now
Imagine a playground on Wall Street, with a bunch of kids screaming "Is too! Is too!" and a lone dissenter shouting back "Are not! Are not!"
The dissenting voice could easily belong to Robert Arnott , editor of the prestigious Financial Analysts Journal and chairman of Research Affiliates in Pasadena, Calif., a money manager with $6 billion under management.
I previously profiled Mr. Arnott, now age 50, in early 2002. At the time, he was recommending inflation-indexed Treasury bonds and real-estate investment trusts. He also thought high-yield junk bonds and emerging-market stocks and bonds were attractive, but suggested waiting until later in the year before buying. The reason: He was forecasting a third consecutive losing year for the Standard & Poor's 500-stock index.
Today, his predictions look remarkably prescient. The S&P 500 did indeed lose money in 2002 and the great buying opportunity did indeed come later in the year. REITs, inflation bonds, emerging markets and junk have all been stellar performers in recent years. So what's on Mr. Arnott's mind today? I recently sat down with him at his Pasadena home.
Taking Stock
Three years ago, Mr. Arnott was arguing there was a risk stocks might underperform bonds over the next 10 or 20 years. Three years later, he's still dishing out predictions that most investors don't want to hear. He reckons the S&P 500-stock index might clock just 5% or 5?% a year over the next decade, only slightly ahead of the 4?% return he's predicting for long-term high-quality bonds.
"If you ask 100 investors if they're holding stocks to earn barely 1% over bonds, they'd say no," he notes. "They're all expecting much more than that."
Part of Mr. Arnott's pessimism stems from an analysis of historical returns. He points out that, over the past eight decades, a big part of the S&P 500's return has come from both rising price/earnings multiples and fat dividend yields. Today, with the S&P 500 yielding less than 2%, dividends won't contribute much to returns. And, if anything, P/E multiples are more likely to fall than rise.
In fact, Mr. Arnott believes stocks are more richly valued than many investors realize. Based on figures from Standard & Poor's, a unit of McGraw-Hill, it appears the S&P 500 is trading at around 20 times 2004's reported earnings, somewhat above the historical average of 16 times trailing 12-month earnings. That makes the market appear expensive, but not outrageously so.
Mr. Arnott, however, contends the true earnings of the S&P 500 are far lower. Figure in the cost of employee stock options, the under-funding of corporate pension plans and other aggressive accounting moves, and he says the S&P 500's real earnings might be 25% below published numbers. If Mr. Arnott is right, that puts stocks at an alarming 27 times trailing earnings.
Picking Fruit
While Mr. Arnott remains downbeat about the prospects for the S&P 500, one thing has changed from three years ago: He no longer sees a lot of other attractive opportunities.
"Markets are broadly priced for inadequate returns," he says. "We're currently in a world of no low-hanging fruit. In that world, it makes sense to diversify more broadly than ever before."
Mr. Arnott does just that as manager of the Pimco All Asset Fund, a $5.5 billion mutual fund that makes its money by investing in other funds offered by Pimco Funds, a unit of Allianz AG. Through its investment in these other funds, the Pimco All Asset Fund owns a smattering of all markets. Nonetheless, Mr. Arnott has emphasized certain sectors in recent years, notably commodities, inflation-indexed bonds and emerging-market debt.
"Are there ways to make money in a world of low returns?" Mr. Arnott asks. "Yes, but you're getting more and more out of the mainstream."
Mr. Arnott figures higher inflation lies ahead, which is one reason he likes commodities. He also sees hefty demand for commodities from fast-growing emerging markets, especially China.
There are only a couple of mutual funds devoted to commodities. As it happens, Pimco offers one of them, in the form of Pimco CommodityRealReturn Strategy Fund. If you are a no-load fund investor and you want to buy this or any other Pimco fund, your best bet is the D shares, which are sold through the mutual-fund supermarkets offered by discount brokers and large no-load fund companies.
Mr. Arnott has been a longtime fan of inflation-indexed bonds, and he remains enthusiastic despite the drop in yields over the past five years. He notes that conventional long-term Treasurys have delivered a long-run total return that is some two percentage points a year above inflation.
As he sees it, inflation bonds -- sometimes referred to as Treasury inflation-protected securities, or TIPS -- should be priced to deliver even less. Why? Inflation bonds remove one of the major risks associated with conventional Treasurys, which is the risk of unexpected inflation.
If inflation spikes higher, conventional Treasurys will get hammered. But in that scenario, inflation bonds should fare just fine, because their value steps up along with inflation.
Today, 20-year inflation bonds yield some two percentage points above inflation. "I would not be entirely shocked if, 10 or 15 years from now, long TIPS yields were below 1%," Mr. Arnott says. "I would be surprised if they were above 1?%."
Interested in inflation bonds? Mr. Arnott's fund is invested in Pimco's inflation-indexed bond fund. But you might also check out the low-cost funds offered by American Century, Fidelity Investments, T. Rowe Price Group and Vanguard Group.
Like inflation bonds, emerging-market debt has performed well in recent years. Mr. Arnott notes that emerging-market debt used to be considered below "investment grade," meaning there was a serious risk of default. Since then, bond prices have risen and yields have fallen, as the risk of default lessens.
"The quality is ramping up," he says. "Fifteen years ago, 100% of emerging-market debt was below investment grade. Today, 60% is above. I like emerging-market debt, even at today's relatively modest yields."
Unfortunately, when it comes to emerging-market bond funds, there aren't a whole lot of attractive options. But you might check out Pimco Emerging Markets Bond Fund and TCW Galileo Emerging Markets Income Fund.
看一位逆向投资者如今怎么说
设想在华尔街的游乐场上，一群孩子在大喊，“也是！也是！”，而只有一个孩子和他们意见相左，冲著他们高呼“不是！不是！”
这个反对的声音很可能就是来自罗伯特?阿诺特(Robert Arnott)，他是著名的《金融分析家》杂志的编辑、加州Research Affiliates的董事长，一个管理著60亿美元资产的基金经理。
我早在2002年初曾采访过他，他当时推荐大家投资通货膨胀保值美国国债和房地产投资信托基金(REIT)，并认为高收益率的垃圾债券、新兴市场股票和债券都很吸引人，但他建议投资者等到当年晚些时候再行买进，因为根据他的预测，标准普尔500指数将连续第三年下跌。
今天看来他当时还是很有先见之明的：2002年标准普尔500指数的确遭遇重挫，而当年的晚些时候也确是买进的良机。近几年来，REIT、通货膨胀保值债券、新兴市场和垃圾债券纷纷变成了市场明星。那么，阿诺特现在又对市场有什么新看法呢？最近我和阿诺特在他位于帕萨迪纳的家中进行了一番交谈。
股票投资
三年前，阿诺特认为，在未来10到20年中，债券投资的回报率可能要超过股票投资；三年后，他仍然坚持多数投资者都不愿意听到的这种预言。他认为，标准普尔500指数未来10年的回报率将只有5%或5.5%，比他预测的高质量长期债券4.5%的回报率仅略高一些。
他指出，要是问投资者愿不愿意自己的股票投资回报仅较债券高出1%的话，100个投资者都会回答说不愿意。他们都希望股票投资能带来更大的回报。
阿诺特的这种悲观情绪在一定程度上源自于他对历史数据的分析。他指出，在过去80年里，标准普尔500指数的回报率很大一部分来自于本益比和股息收益率的提高。如今，标准普尔500指数股息收益率不足2%，股息很难在提高回报方面再有所作为，同时，本益比下降的可能性也要高于上升的可能性。
实际上，阿诺特认为，股票的估价水平要较许多投资者想像的更高。根据标准普尔的数据，标准普尔500指数按2004年收益计算的本益比为20倍，略高于其12个月往绩本益比为16倍的历史平均水平。从这一点看，股价似乎有些偏高，但还不至于高得离谱。
不过阿诺特认为标准普尔500指数的实际收益水平要低得多。他说，如果将员工期权成本、公司退休金计划未足额提取部分等会计项目计算在内，标准普尔500指数的实际收益水平可能较其公布的数字低25%。如果阿诺特是对的，那么标准普尔500指数的往绩本益比将达到27倍这一让人担忧的水平。
收获果实
虽然阿诺特依然对标准普尔500指数的前景表示悲观，但他有一点看法与三年前不同：他不再认为还存在其他许多投资良机。
他说，如今的股价普遍与其回报不相称。在如今的市场，轻松赚钱已经是不可能的事情，因此人们的投资应该较以往更加地分散。
作为Pimco All Asset Fund的基金经理，阿诺特的确也是这样做的。Pimco All Asset Fund是一家规模为55亿美元的共同基金，主要投资安联保险公司(Allianz AG Holding)旗下Pimco Funds推出的其他基金。通过投资这些基金，Pimco All Asset Fund对所有市场都有所涉猎。尽管如此，近年来阿诺特对某些市场还是情有独衷，特别是商品市场、通货膨胀保值债券和新兴市场债券等。
阿诺特预计未来通货膨胀率将上升，这也成了他青睐商品市场的一个原因。他预计，快速增长的新兴市场、特别是中国对商品的需求将十分强劲。
市场上只有少数几只共同基金专门投资商品市场，而Pimco的Pimco CommodityRealReturn Strategy Fund恰巧就是其中之一。
阿诺特长期以来一直十分看好通货膨胀保值债券，虽然过去五年此类债券收益率不断下滑，他依然对其抱有信心。他表示，传统长期美国国债的长期年回报率水平较年通货膨胀率高出两个百分点。
阿诺特认为，通货膨胀保值债券的定价应该使其收益率较这一水平更低。为什么呢？因为通货膨胀保值债券剔除了传统美国国债面临的一个主要风险，即通货膨胀率的意外变化。通货膨胀保值债券有时专门是指美国国债通货膨胀保值债券(TIPS)。
如果通货膨胀率飙升，传统美国国债就会受到打击，而在这种情况下，通货膨胀保值债券则会安然无恙，原因是它们的价格会随著通货膨胀率的上升而升高。
目前，20年期通货膨胀保值债券的收益率较通货膨胀率高出两个百分点。阿诺特称，从今往后的10到15年时间内，如果长期TIPS的收益率跌至1%以下他都不会感到震惊，若非如此倒会让他感到意外。。
和通货膨胀保值债券一样，新兴市场债券近些年来的表现也可圈可点。阿诺特称，新兴市场债券通常都被认为是低于“投资级”的，也就是说，有很大的偿付风险。其后随著偿付风险的降低，新兴市场债券价格不断攀升，收益率不断下降。
阿诺特表示，此类债券的质量在不断提高，15年前，所有的新兴市场债券都在投资级以下，而今天，有60%的新兴市场债券评级在投资级以上。他就看好新兴市场债券，即使目前收益率还处在较为温和的水平。
不幸的是，当涉及到新兴市场债券基金时，就没有多少诱人的选择了。不过投资者可以查询一下Pimco Emerging Markets Bond Fund和TCW Galileo Emerging Markets Income Fund这两种基金。
