The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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dualstow
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Re: The Bond Dream Room

Post by dualstow » Mon Feb 03, 2020 2:19 pm

sophie wrote:
Mon Feb 03, 2020 7:42 am
What are all of you guys planning to do with your individually held long bonds when they're no longer long?
I've done it all wrong so far. Why stop now? O0
I very well might hold on to mine for an extra year or two, but that's easy because I'm underweight in bonds.
And, I'm underweight, because I sold my worst ones early.
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Re: The Bond Dream Room

Post by Kbg » Wed Feb 05, 2020 6:46 am

Rationally you hold if you are carrying something that yields higher than the replacement. There are no interest change scenarios where replacing them does better financially. Eventually as the bonds age that could change, but not for a while.
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Re: The Bond Dream Room

Post by dualstow » Wed Feb 05, 2020 8:24 am

Kbg wrote:
Wed Feb 05, 2020 6:46 am
Rationally you hold if you are carrying something that yields higher than the replacement. There are no interest change scenarios where replacing them does better financially. Eventually as the bonds age that could change, but not for a while.
Of course, that’s the opposite of Harry’s advice. You replace the bonds regardless of the fact that the new ones pay less yield, because you need that duration. And you do that by selling what you have if it’s only got 20 years on it. Thank heavens there’s a vp. O0

Who was it, 6Iron maybe, who said, “I feel like a complete idiot (selling these bonds and buying news ones at these low interest rates).” That was already a few years ago, and the 30-year-yield was higher than the current 2%.
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Re: The Bond Dream Room

Post by Kbg » Wed Feb 05, 2020 8:04 pm

I don’t disagree with HB and one should pay attention to duration as a guidepost as to when to get longer again.

Simplicity is just do the rules, but applying concepts appropriately is better.

Duration and yield tell you everything you you need to know to make a solid bond decision (and taxes if you have a capital gain).
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Re: The Bond Dream Room

Post by dualstow » Fri Feb 21, 2020 2:11 pm

I have some zeroes that are supposed to reach value x in the year 2033, but they're getting close to x now. No point in holding on to zeroes (i.e. payments have been STRIPPED), right?
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Re: The Bond Dream Room

Post by dualstow » Tue Feb 25, 2020 11:15 am

dualstow wrote:
Fri Feb 21, 2020 2:11 pm
I have some zeroes that are supposed to reach value x in the year 2033, but they're getting close to x now. No point in holding on to zeroes (i.e. payments have been STRIPPED), right?
✓ Sold them today. Lovely. Go, long bonds!
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Re: The Bond Dream Room

Post by pmward » Tue Feb 25, 2020 1:33 pm

Holy crap, 10 year treasury finally hits new record low in yield. 30 year hits record low yield 2 days in a row. If the stock correction continues this could be a great time to opportunistically "rebalance" some profits from gold/long bonds back into stocks before the Fed starts capitulating and buying the market back up again.
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Re: The Bond Dream Room

Post by Ad Orientem » Tue Feb 25, 2020 5:24 pm

30 year munis yielding 1.6%. I need to lie down.
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Re: The Bond Dream Room

Post by Kriegsspiel » Tue Feb 25, 2020 6:45 pm

Yea it's getting pretty silly.
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Re: The Bond Dream Room

Post by Ad Orientem » Thu Feb 27, 2020 9:01 am

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Re: The Bond Dream Room

Post by Cortopassi » Thu Feb 27, 2020 2:55 pm

Well at least bonds are holding. I am finding gold's response the past two days a bit strange.
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Re: The Bond Dream Room

Post by dualstow » Thu Feb 27, 2020 3:06 pm

Cortopassi wrote:
Thu Feb 27, 2020 2:55 pm
Well at least bonds are holding. I am finding gold's response the past two days a bit strange.
Have you two met? O0


(You and gold, I mean)
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