Hope everyones holiday was fine and are ready for a new year. I read where the media is postulating that thank heavens it is over (2008). I myself found 2008 quite rewarding and not just for money sake.
We did post about the possible bubble in treasuries. This fast unusual run up is now having an unusual quick drop.
We just move from one bubble to the next the last decade or so. Who ever thought you would get double digit returns from bonds? Now look at the drop in them.
If you missed the pop, dont fret, these things have other chances. Wait for the next run up to get a position. My favorite is a diagonal put on TLT. This ride down although will have moments of fast movements, will be a longer period than most will expect. Much like the unwinding of R.E. in its 2nd year and equities in their 14 months. This too will take a few years to reach bottom.
2 comments:
Hi Dell,
I just heard on CNBC, somebody from T Rowe Price saying that they are buying high-yield bonds because he believes the bonds will boom in the future as much as 40%.
His argument was that it happened in the early 90's as well.
How could this be?
They have a 0 yield right now.
I just can't see it.
That is my thinking as well. Cant go much below zero.
What is really scary is this money sloshing around is going to come home to roost. How much will these bonds be worth with so many bonds around? Supply and demand.
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