The Great Bond Bubble?

Discussion of the Bond portion of the Permanent Portfolio

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Kevin K.
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The Great Bond Bubble?

Post by Kevin K. » Mon Feb 26, 2018 10:41 am

Apologies if this was discussed when it first came out but it sure seems timely as ever given what has happened since (and the author points this out - there's been no need to revise it). The author has a more recent article on asset bubbles across the board that I'll post on the general PP forum. He seems to be arguing for exiting the stock and bond markets in favor of cash and real assets but I guess one has to sign up for one of his courses to learn the details, which doesn't appeal. I can't argue with his analysis and his track record in calling market tops is impressive.

https://financialmentor.com/investment- ... ubble/9064
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europeanwizard
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Re: The Great Bond Bubble?

Post by europeanwizard » Mon Feb 26, 2018 1:13 pm

Yeah, this has basically everybody worried. When I started my portfolio last year, I also had severe doubts:
viewtopic.php?t=9082

For everybody outside the USA, it's even worse than sketched. I'm from the EU and after a lot of hemming and hawing, I started with an ETF that has European bonds with a 7-10 year duration.
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ochotona
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Re: The Great Bond Bubble?

Post by ochotona » Mon Feb 26, 2018 8:13 pm

My bond duration is down to 5 years. Taken together with cash, they are 3 years. Definitely not HBPP. Well... there's a small HBPP in there somewhere, surrounded by a huge rind of Otherness.
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buddtholomew
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Re: The Great Bond Bubble?

Post by buddtholomew » Tue Feb 27, 2018 5:47 pm

Does anyone hold LTT’s or am I the idiot left holding the bag?
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eufo
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Re: The Great Bond Bubble?

Post by eufo » Tue Feb 27, 2018 6:02 pm

buddtholomew wrote:Does anyone hold LTT’s or am I the idiot left holding the bag?
Lol! I still have some in my retirement account. I sold off all of the rest.
Don't agree with me too strongly or I'm going to change my mind
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Xan
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Re: The Great Bond Bubble?

Post by Xan » Tue Feb 27, 2018 8:13 pm

I'm not sure the exact percentage, but I'm in the PP range for LTTs. If it were a sure thing that the price would be lower, then it would be lower right now. All the worry is priced in.
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Tyler
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Re: The Great Bond Bubble?

Post by Tyler » Tue Feb 27, 2018 8:21 pm

I love my long term treasuries. They complement my short term bonds perfectly.

In a world full of risky investment options and overvalued assets across the board, the thing I like about the PP is how it diversifies those risks rather than stressing about how to avoid them. I personally relate to that antifragile mindset and how it makes your overall portfolio stronger.
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Re: The Great Bond Bubble?

Post by dualstow » Wed Feb 28, 2018 8:42 am

I’m trying to resist the pull of the Warren Buffett interview I saw the other day. He’s still pro-equities, of course.

Long bonds have been good to me. Sometimes I wish I’d sold them when they were really good. When 10-years are yielding more than my 30-years, I’m going to feel silly.
Good news everyone: AOC and Maxine Waters are going to oversee Wall Street.
All should be well from here on in. O0 #stockscreamroom
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Tyler
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Re: The Great Bond Bubble?

Post by Tyler » Wed Feb 28, 2018 10:50 am

dualstow wrote:I’m trying to resist the pull of the Warren Buffett interview I saw the other day. He’s still pro-equities, of course.
I know a lot of people rightfully admire Buffett, but whenever I hear his comments on bonds, gold, and other assets I'm reminded that his core business is to convince people to buy his stock fund.
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ochotona
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Re: The Great Bond Bubble?

Post by ochotona » Thu Mar 01, 2018 9:14 am

If the 10 year Treasuries interest rate goes high enough, I will just buy a bunch and hold them to maturity. Retirement in 8 years. My hurdle rate for retirement success is not too high.
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Re: The Great Bond Bubble?

Post by Ad Orientem » Thu Mar 01, 2018 9:18 am

buddtholomew wrote:Does anyone hold LTT’s or am I the idiot left holding the bag?
I do. This is what the HBPP was built for. And if you are in the PP you sort of take it for granted that one of the four assets (well really three) is going to be taking a hit. This year it's kinda looking like it's going to be tough sledding for bonds. Just remember you also hold stocks, gold and cash. My guess is you are in better shape than people who are piled into either stocks or bonds.
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Re: The Great Bond Bubble?

Post by pugchief » Thu Mar 01, 2018 1:12 pm

Timely article from the Schwab desk:
Bond Bear Market: Why Investor Fears May Be Overblown
Historically, bond bear markets tend to come and go relatively quickly, leaving investors who stayed in the fixed income market relieved they didn’t jump out. Nevertheless, because so many people have expressed fear of the current bond bear market, it may be useful to take a deeper dive into how various types of bonds have performed during bear markets. As we always say, past performance is no guarantee of future results, but perhaps a look back can be enlightening.
Last edited by pugchief on Thu Mar 01, 2018 10:45 pm, edited 1 time in total.
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