October 12, 2020 BARRON’S 35
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Recipe for Fewer
Covid Cases
To the Editor:
President Donald Trump’s getting the virus might help
control the pandemic if it causes people to wear masks
and practice social distancing and otherwise take
common-sense precautions (“What to Know About
President Trump’s Diagnosis and the Outlook for
Stocks,” Cover Story, Oct. 2). Not to wish harm to the
president, but his illness actually could be helpful if
some of the virus naysayers finally see the light. Fewer
cases will help the troubled industries as much as any-
thing.
Michael Schneider
On Barrons.com
Fixed-Income Challenge
To the Editor:
In a world where investors increasingly achieve market
exposure through indexing, portfolio construction
should account for index composition (“A 60/40
Stocks/Bond Strategy Doesn’t Work. What to Do In-
stead,” Up & Down Wall Street, Oct. 2). At times, a few
single-name equities drive the market’s performance,
raising questions of concentration
risk. While this diversification chal-
lenge is well known in stocks, it’s
parallel in fixed income is less so.
Certain bond indexes are weighted
based on debt outstanding, skewing
toward more heavily indebted bor-
rowers. With a host of firms issuing
incremental debt to manage the pan-
demic, it’s a point worth considering
when determining appropriate asset
allocation.
Gray Schweitzer
Brooklyn, N.Y.
Relative Risk
To the Editor:
I was delighted to see your focus on
the current low-yield fixed-income
landscape in “How to Build the Best
Bond Portfolio for Crazy Times”
(Funds Quarterly, Oct. 2). The article
covered alternatives to the bond allo-
cation in the benchmark 60/40 in-
vestment plan, since the typical his-
torical returns cannot be achieved
with current interest rates so low.
My concern is the tradeoff re-
quired in relative risk that one needs
to assume within the presumed safer,
ballast portion of a portfolio. For ex-
ample, we purchase various forms of
insurance to alleviate risk with no
expectation of a return. Will the al-
ternatives recommended hold up in
value when the inevitable periodic
equity market downdrafts occur, al-
lowing investors the opportunity to
hold off on selling when prices are
down and wait for the eventual re-
turn in valuations? Will stretching
for yield jeopardize a sound risk-
management investment strategy that
has stood the test of time? As with
most investment decisions, only time
will tell.
Dr. Douglas Prop
Glenview, Ill.
Value, ex-Energy
To the Editor:
I feel a bit like Charlie Brown, being
lured back by Lucy—and Barron’s —
into “kicking” the energy football.
Despite the high-yield possibilities
listed in your twin Oct. 2 stories
(“These 6 Pipeline Funds Offer a
Cheap Way to Play a Rebound in
Energy,” and “Oil Stocks Offer Big
Dividends. Some Might Even Be Safe
Enough to Buy,” Income Investing),
I don’t want to wind up flat on my
back.
I appreciate your comprehensive
analysis in both stories, and recall
the wisdom of oil baron J. Paul Getty
suggesting that I consider “buy[ing]
my straw hats in the winter.”
MightIsuggestanewangle?I’d
welcome Barron’s calling the massive
pension funds at the California Pub-
lic Employees’ Retirement System,
Harvard University, Stanford Univer-
sity, and many others, and asking
their managers how many energy
holdings they still have, and when
they intend to stop selling. When that
massive overhang in the sector is
nearing its end, I expect it may finally
be time to buy. Until then, I’ll stick to
value, ex-energy.
Thomas V. Ward
Cumberland, R.I.
Game On
To the Editor:
Don’t overlook GameStop [ticker:
GME] as a key beneficiary through
all of this (“Videogame Stocks Have
Soared for 20 Years. They’re About
to Get Another Boost,” Oct. 2).
A majority of gamers (myself
included, at age 31) vastly prefer
physical games over digital down-
loads, as evidenced in part by the
preorders of the consoles with disk
drives over the cheaper digital-only
editions. The digital shift is over-
stated, in my opinion.
Will Jones
On Barrons.com
Wealth-Gap Solutions
To the Editor:
One solution to close the wealth gap
is a proposed $10 trillion to $12 tril-
lion in direct payments to Black
Americans descended from slaves
(“Closing the Wealth Gap Is One Key
to Recovering From the Pandemic,”
Preview, Oct. 2).
I am very sympathetic to the situa-
tion of Black Americans. However, if
the government is considering repa-
rations, Native Americans should be
first in line.
Robert Perez
Tucson, Ariz.
Health-Care Tunnel
To the Editor:
The Roundtable article “10 Stocks to
Buy as the Health-Care Revolution
Races Ahead, According to Experts”
(Sept. 25), by Lauren R. Rublin, was a
bright light at the end of a very long
dark tunnel that is this pandemic.
Although all of the comments were
optimistic and remarkably idealistic
and mission-driven (rather than just
profit-driven), I found Geoffrey
Porges’ final comment most compel-
ling. Unless we have a robust public-
health system that is financed like a
branch of the military and with the
same zeal as our biotech industry, we
will be circling back to this long dark
tunnel—very soon.
Dr. Louis J. Papa
Rochester, N.Y.
“Will stretching for yield jeopardize
a sound risk-management
investment strategy?”
Dr. Douglas Prop, Glenview, Ill.