Bill Gross, head of PIMCO, often known as the "King of Bonds," is advising investors against "Euroland' and instead to consider Brazil "with its agricultural breadbasket and its oil" and Asia "with its underdeveloped consumer sector."
As Gross notes in "Family Feud," his latest piece in the Financial Times, all traders should beware of credit bubbles and look for the countries with the "cleanest dirty shirts" out there -- which happen to be the United States, United Kingdom, Canada and Australia. He suggests higher-quality corporate bonds and rolling portfolios down the yield curve in order to generate capital gains over and above "stingy" coupon rates. Gross thinks 5% returns will be the ceiling for some time to come. As he puts it, "financial markets will remain low-returning and frequently frightening" for months or years to come as deflationary policies go into effect despite being "in some cases too little, in some cases ill conceived and in many cases too late." Gross contends these factors will adversely affect stocks in countries such as the United States and Japan. This differs from other billionaire investors such as Warren Buffett and Carl Icahn who are buying or considering companies in the United States and Japan -- and Buffett is even willing to look at companies that are heavily exposed to Europe. This was detailed on www.emergingmoney.com in the article, " Warren Buffett to Europe: I want your business, but not your bonds.
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