iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,536 Blog Posts

The No Brainer Trade of the Summer

With German and French 10 yr yields comfortably below 2%, heading into the balmy summer months of 2014, doing “The Hugh Hendry” or getting long US treasuries as the deflationary vortex grabs hold is your no brainer trade of the summer. You might be able to make 10-50% on a wide array of solar and chinese burrito stocks. You might enjoy the lavish accoutrements that this planet has to offer after a gigantic biotech win. But no trade is as simply and seemingly assured as getting long TLT as July progresses.

Any dip shall be purchased with extreme vigor and perverted intentions.

Over the past 12 years, during the month of August, TLT has gone down twice–in 2012 and 2013. In both years, the bond ETF fell a little less than 1.5%, not including the 0.3% it paid out in monthly dividends. I believe this year will be different than the past two. I believe, with every fabric of win in my body, that bonds will continue to go higher because the government cannot afford for yields to go up. Plain and simple.

TLT

My strategy will be to enjoy my wins; but steadily divest myself from equities over the next 5 weeks until I am overweight TLT for the month of August.

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25 comments

  1. smartestone

    the george costanza trade is to short volatility.

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    • helicopter ben

      A lot of volatility etf/etns go down naturally, but what is the upside potential on that trade?

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      • smartestone

        depends on the strike and duration. Selling 3x VX Oct. contracts has profit of ~$10k assuming VIX ends around 11.6

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  2. Yinzer

    Summahtime is all about SCTY, ENPH, CSIQ.

    SPWR and TSL are too expensive.

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  3. Dr Fly

    Shut up bitch

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  4. Ohthe BOMB

    I don’t go long US bonds unlesss the rate is ABOVE 7%.

    That’s when everybody hates bonds.

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    • Bullish

      I would leave a note for your great grandchildren, maybe they will get that opportunity.

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    • J

      Dude, if bonds went to 7%, with the current US level of debt, you wouldn’t want them as there wouldn’t be much of a US economy left. Debt servicing would imply around $1.2 trillion of interest a year going forward. This would mean around 20% of US federal government receipts going to meet interest payments.

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  5. smartestone

    Weird how market that is up so much can be have so schizophrenically.Refuse to buy any stock except selling FB puts and JNJ

    The story of 2014 has been mid cap stocks getting 20-60% haircuts for no reason , so picking stocks is out .

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  6. JC

    Fly

    Really? Is it that time of year/ decade when it’s time for the Hugh Hendry?

    Funny you mention him because i was discussing Hendry earlier today. Hendry gave the old communist, Joe Stigliz a huge beating on the BBC when Stigliz was spinning for Greece just before it went down the drain.

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  7. Brad

    Rumor that IMMR technology is in iPhone 6/iPad. Huge volume coming in during first 30 min of trading…

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  8. Halfbloodpope

    If TLT makes me money in August I will be on the market for a Chevy Cruze.

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  9. Tau

    CYS is a reit that is leveraged long treasuries. worth looking into.

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  10. I Am Jesse Livermore

    shorts in 3D printing stocks are getting their nuts squeezed! long ONVO

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    • smartestone

      If I were to short, it would be these three dead-cat bounces:

      P
      DDD
      SCTY

      probably throw in a bunch of cloud storage names in there as well and other techs

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    • Ohthe BOMB

      3D printing, Google glass, and Twitter are the three dumbest
      “technical ideas” since the year 2000.

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  11. Forgetalpha

    Fly, did Bluestar go on hiatus voluntarily or did you tell him to go back to the drawing board? Or is he using the typical young fund strategy, i.e. scrap it and start over if you blow up right off the bat & ruin you’re track record (like he did).

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  12. Yinzer

    banned again?

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    • Dr. Fly

      Yinzer

      The next time you comment, it will go directly to the garbage bin. Reason being: you’re an asshole.

      Have a nice day.

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  13. budh

    I’m going for yes brainer trades this summer. Why make 10% on TLT when you can make 50-100% in solars, biotech, china burritos and social media options?

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  14. Trent

    I like the look of that screen Sir Fly. Is this what the new PPT looks like or a different platform to which I have not yet been introduced?

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  15. http://lte.Gadzetomania.pl/2011/07/21/Gry-w-chmurze-dlaczego-lte-Jest-niezbedne

    It’s hard to find experienced people about this topic, however, you
    sound like you know what you’re talking about!
    Thanks

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