The Spotlight of this issue is about fixed income. I spent my career following equities, so I am going to look at fixed income from an equity point of view. Stock managers may think of themselves as fighter pilots, heroic risk-takers laughing in the face of danger, and bond managers as boring airline pilots, glorified bus drivers. That metaphor is colorful but wrong. Fixed income is where the bulk of investments resides.
I traveled to Argentina in 1997 with my friends Nissim and Deena. After a splendid trip, it was time to take taxis to the Buenos Aires airport and head home. Nissim, a shrewd New Yorker, explained how he was going to negotiate a fixed price for the cab, while I decided to stupidly pay the meter fare. When we arrived, Nissim proudly announced he had done the trip for 40 pesos. I did not tell him that our meter read 36 pesos.