Strategic Fixed Income Investing: An Insider's Perspective on Bond Markets, Analysis, and Portfolio Management

CHAPTER 4

Direction in a Sometimes Directionless Market

Success is not final, failure is not fatal: it is the courage to continue that counts.

—Winston Churchill

From time to time over the course of investing, you will find yourself in a quandary. You will wake up, do your routine, have your coffee, and ask yourself, “What trade am I going to put on today?” If you find yourself asking that question, you are asking for trouble. There may not be a lot of opportunities to make money on a daily basis. Early in my asset management career, I would be one of the first in the office, reading the Wall Street Journal and Financial Times. Next, I would scroll through the headlines across the wire services, check how the foreign markets were trading in the overnight session, get my coffee, and finally be ready to start my day, all before 7:00 A.M. One morning I must have had a look of frustration written across my face. The head of the desk took one look at me and asked, “What's the matter?” He was probably thinking I put a trade on and it was already going against us. I assured him that we were not on the wrong side of a trade, and we were not losing money! He asked, “So what is the problem, then?” “It's quite the opposite,” I said. “I am frustrated because I am having trouble finding a trade to put on.” He looked at me and laughed, and mumbled some colorful words. The lesson that day was there are not always a lot of solid opportunities to make money. In fact, there are more chances to lose ...