Apple Is the New Pimco

> Getting allocations of corporate bond deals is one of the easiest ways for managers to outperform benchmark bond indexes because they’re typically sold at a discount to market rates, according to Jason Shoup, the head of U.S. high-grade credit strategy at Citigroup Inc. The bonds aren’t added to the indexes investors are measured against until the end of each month. That can generate as much as 0.2 percentage point of additional gains for investors who get in early, Shoup said.

If you ever wanted to know about the bond market there are two pieces of gold in the above lines.

1) Getting in on new issues is free money. Stocks are the same. Steve Cohen at SAC was famous for overpaying on commissions just to get the first call for new issues. When bond funds return 1.1% and beat the market having an additional 0.2% really puts you ahead of the competition to the tune of 18% in gains for free.

2) The fact that the gain is 0.2%, not 2% or 20%, 0.2%. Bonds are a volume game. You find an angle to make 0.2% and lever the hell out of it. Having said that, this is the playbook directly from LTCM.

I know Apple keeps a lot of its cash in iMattresses.

Yeah, they said "coming in". Where was the money before? There must also be some other investment vehicle where a drain happens.

Glad to hear it. Hope your day gets better from here!

> Apple, Oracle, Google Inc. and seven of their biggest peers now have in excess of $500 billion of cash and marketable securities, up more than three-fold since 2008, according to data compiled by Bloomberg. The problem is much of it is stuck overseas.

Stuck overseas in the sense that these corporations aren't willing to pay American taxes [1], insisting on using complex tax loopholes that essentially leave the bill on the doorsteps of normal, hard working American citizens.

[1] http://dealbook.nytimes.com/2013/10/08/to-cut-corporate-taxe...