Say what you want about my feverish hankering for bonds, via TLT. This singular position is up more than 17% for the year, absolutely poleaxing everything in its wake.
Repeatedly, I hear people telling me ‘get off the ark man, it’s gonna sink.’
Fuck you, no it’s not.
The bull case for bonds has never been stronger. Central banks are in easing mode, which bodes well for bond buying lunatics. The more QE, the lower yields go. Over in Japan, the JGBs are at record low yields.
Over in Germany, yields cratered by more than 5bps to -0.08%.
You do understand this is all interconnected, right? Arb players will continue to ping off JGBs to Bunds and then to Treasuries. This is how this trade has played out for the past 8 years and it’s how it will continue to trade in the future.
What if the Fed hikes rates?
It will only affect short dated bonds, the 2yr, not 30yr treasuries. As long as Japan and Germany wallow in negative territory, there is a profound bull case to be made for our very cheap and very attractive bonds.
I will remain long TLT, with 25% of my assets, until the yield curve inverts.
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If I come to NYC again, can we do dinner?
I don’t live near NYC anymore.
Oh. I think I knew that but I’m getting up in age so. Everything is new to me.
Marc- What is this, the ” I’m going to be dead soon” approach? I tried this with women, it does not work. 🙂
That would imply you just want a Tinder type relationship and for the most part, that’s not gonna get you many good fish.
Dear Fly
I’m also aboard the ark for many months now, right next to the Leopon, who sends his regards.
https://en.wikipedia.org/wiki/Leopon
Can you please elaborate on your yield curve inversion thesis?
Creating a Leopon while on the high seas is frowned upon. There is only so much room. You will no longer reside below decks, as your abomination will be taking your place in the Lounge. I do not believe a Leopon can reproduce, so having more than one would be redundant. Carry on…
Quite pleased with my emerging market bond exposure in my 401(k) this year.
Arb comment is brilliance. Well done, la Mosca.
You are a smart man.