Pimco Is Overweight Software Stocks, Wary of `Unicorns'

The video discusses the evolution of the tech sector since 2000, highlighting the differences between established tech companies with strong growth and cash flow, and newer companies still incurring losses. It emphasizes the importance of distinguishing between these two categories for investment purposes. The discussion then shifts to corporate credit space, advising caution in high-yield investments and recommending a focus on securitized investments like non-agency mortgages due to their fair risk premium relative to history.

How does the tech sector today differ from the 2000s according to the speaker?

• It is more reliant on government funding.

• It has less competition.

• It is divided into established and newer companies.

• It is more focused on hardware.

What makes established tech companies attractive investments?

• They are new to the market.

• They have high debt levels.

• They have high growth and strong cash flow.

• They focus solely on hardware.

What is the speaker's advice regarding high yield investments?

• Invest heavily in long-term high yield.

• Avoid high yield investments completely.

• Be cautious and focus on short-term high yield.

• Only invest in high yield if it is government-backed.

Which area does the speaker prefer over high yield in corporate credit?

• Government bonds

• Securitized areas like mortgages

• Venture capital

• Cryptocurrency

What is a potential risk in the credit asset class mentioned by the speaker?

• Excessive regulation

• High inflation

• Lack of innovation

• Bumpy liquidity