Cal STRS looking at commodities play

http://www.bloomberg.com/apps/news?pid=20601087&sid=adUC4S1obfh4&pos=7

The California State Teachers’ Retirement System, the second-biggest U.S. public pension, is considering investments in commodities to boost returns and provide a hedge against inflation and slumping equities.

The governing board of the fund, with $134 billion under management, is scheduled to hear today a staff report in Sacramento that recommends its first-ever commodity investment. The board will decide whether to seek additional research on strategies and portfolio weightings.

Given their poor timing and wrong-way investments, is it time to exit the commodities reflation play? They're only a year late.

Pension funds are in trouble

http://www.bloomberg.com/apps/news?pid=20601039&sid=aKQk6SUcSr3A

This Bloomberg provides insights on the perils of investing for big pension funds. The "crowding effect" virtually guarantees underperformance, as consultants and pension managers invest to avoid fiduciary litigation, not for investment returns. This leads to unfunded pensions--and eventual promises unpaid.

Here is an article sizing up the unfunded California Teachers pension fund:

http://articles.latimes.com/2010/jan/29/business/la-fi-calstrs29-2010jan29