TBills as "the best horse at the glue factory?"

Discussion of the Bond portion of the Permanent Portfolio

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Kevin K.
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TBills as "the best horse at the glue factory?"

Post by Kevin K. » Wed Sep 21, 2022 11:12 am

Good post on Tipswatch about how to take advantage of the best short-term Treasury rates since 2007. Still losing ~5% to inflation but considering what's happening to every other asset class they may well be the least worse investment of 2022.

https://tipswatch.com/2022/09/21/short- ... ctive-now/
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vnatale
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Re: TBills as "the best horse at the glue factory?"

Post by vnatale » Wed Sep 21, 2022 11:52 am

Good one! Thanks!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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jhogue
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Re: TBills as "the best horse at the glue factory?"

Post by jhogue » Wed Sep 21, 2022 12:10 pm

Kevin K. wrote:
Wed Sep 21, 2022 11:12 am
Good post on Tipswatch about how to take advantage of the best short-term Treasury rates since 2007. Still losing ~5% to inflation but considering what's happening to every other asset class they may well be the least worse investment of 2022.

https://tipswatch.com/2022/09/21/short- ... ctive-now/
Capital preservation always seems boring --- until it's not.

Then it can seem utterly terrifying.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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vnatale
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Re: TBills as "the best horse at the glue factory?"

Post by vnatale » Wed Sep 21, 2022 12:37 pm

jhogue wrote:
Wed Sep 21, 2022 12:10 pm

Kevin K. wrote:
Wed Sep 21, 2022 11:12 am

Good post on Tipswatch about how to take advantage of the best short-term Treasury rates since 2007. Still losing ~5% to inflation but considering what's happening to every other asset class they may well be the least worse investment of 2022.

https://tipswatch.com/2022/09/21/short- ... ctive-now/


Capital preservation always seems boring --- until it's not.

Then it can seem utterly terrifying.


As always underlined by your tagline!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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dualstow
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Re: TBills as "the best horse at the glue factory?"

Post by dualstow » Wed Sep 21, 2022 5:01 pm

My wife is young enough that I will still recommend stocks.
For me, those 4% t-bills look like juicy t-bones.
Let 2022 be the year of— oh screw it. GOLD is on sale
barrett
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Re: TBills as "the best horse at the glue factory?"

Post by barrett » Thu Sep 22, 2022 5:08 am

Coincidentally, I set up a four-rung, one-year T-Bone ladder at the beginning of July and will be able to buy some juicy 4%(ish) one-year Bones at the end of September. I did see on Fidelity's site just now that CD yields have caught up to and even passed the Bone yields for some issues. I plan to keep doing this for a while as it seems unlikely the Fed will stop raising rates overnight.

So the big question (as the Meatwatch article alludes to) is when to start unwinding this strategy by either buying longer dated Bones or switching to CDs, or both.

Of course, as rates keep going up, the existing Bones go down in price for a while so one has to just be able to ignore that.
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dualstow
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Re: TBills as "the best horse at the glue factory?"

Post by dualstow » Thu Sep 22, 2022 1:20 pm

barrett wrote:
Thu Sep 22, 2022 5:08 am
Coincidentally, I set up a four-rung, one-year T-Bone ladder at the beginning of July
...

Mmm, T-Bone ladder. 🥩
Let 2022 be the year of— oh screw it. GOLD is on sale
seajay
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Re: TBills as "the best horse at the glue factory?"

Post by seajay » Thu Sep 22, 2022 7:14 pm

dualstow wrote:
Thu Sep 22, 2022 1:20 pm
barrett wrote:
Thu Sep 22, 2022 5:08 am
Coincidentally, I set up a four-rung, one-year T-Bone ladder at the beginning of July
...

Mmm, T-Bone ladder. 🥩
For stability/consistency a four-rung 7 day ladder of T-Bone's, rolling 28 day maturity. Mmm! In contrast steaks in general are far more volatile, sometimes good, sometimes bad. Feed off the steaks when they're good, fallback to feeding off the T-Bones when steaks in general are poor.

Harry Browne liked a Golden Tomahawk - steak coated with 24 carat gold. So good taste in one respect. But he also liked a combination of short and very long maturity T-Bones, however some dislike such extreme long maturities - consider them to be too jerky, and until more recently, considered overpriced given such low rates of interest.
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dualstow
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Re: TBills as "the best horse at the glue factory?"

Post by dualstow » Thu Sep 22, 2022 8:18 pm

This is Grade A, A-1 advice. Very rare these days.
Well done.
Let 2022 be the year of— oh screw it. GOLD is on sale
barrett
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Re: TBills as "the best horse at the glue factory?"

Post by barrett » Fri Sep 23, 2022 7:09 am

Excellent seajay! You've given me and dualstow a well-done prime ribbing!

It's very interesting to see how Treasury rates are bouncing all over the place the last 24 hours or so. I say "interesting" because people are always talking about how these thoroughly anticipated rate increases are already "priced in" before the hikes happen. I'm no bond expert but that just doesn't seem to be the case. I mean, the only question going into this week's Fed meeting was whether interest rates would rise 3/4 of a point or a full point, right?

I see that the author of the Tipswatch piece has gotten his wish for a 4% yield on the 5-year. The Fido website shows it at 4.04% at the moment,

I guess the bouncing around is related to what Jerome Powell was saying afterward. I only watched a bit but he was pretty clear that one of the things the Fed is trying to accomplish is to cool off the housing market. That will get a lot of people's attention in a hurry. He also talked about trying to set the US up for another 10-year period of growth.

I'm going T-Bone shopping next Friday.
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dualstow
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Re: TBills as "the best horse at the glue factory?"

Post by dualstow » Fri Sep 23, 2022 12:07 pm

Bought some 3-month T-bills in my Roth IRA today. I'm used to buying 1-YR or longer out. This is the first time the yield on such a short term looked attractive to me.
Still nibbling at stocks in the taxable account.
Let 2022 be the year of— oh screw it. GOLD is on sale
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