The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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ochotona
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Re: The Bond Dream Room

Post by ochotona » Wed Jul 11, 2018 5:28 pm

What happened to the bond bear market?

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Re: The Bond Dream Room

Post by boglerdude » Mon Jul 23, 2018 7:04 am

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Re: The Bond Dream Room

Post by dualstow » Mon Jul 23, 2018 8:44 am

Maturity of 1-5 years.
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Re: The Bond Dream Room

Post by boglerdude » Mon Jul 23, 2018 9:07 am

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Re: The Bond Dream Room

Post by dualstow » Mon Jul 23, 2018 9:49 am

Maybe it's not SEC yield?
While Yahoo's numbers always match up with the yield I'm getting on individual stocks, I don't know how they do bond funds.
If you hold VCSH for the "duration" (I mean average maturity in this case), you should get a decent overall yield.
Not pp-ready, of course, but a decent yield for your vp perhaps?
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Re: The Bond Dream Room

Post by dualstow » Mon Jul 23, 2018 10:32 am

For boglerdude, I suppose yield to maturity is the one to focus on. Is that right? I mean, when we really want to get a grasp of the yield we're going to get. (Of course long treasuries in the pp are all about duration).
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Re: The Bond Dream Room

Post by bedraggled » Mon Jul 23, 2018 10:46 am

What's up with the decline in 30-year Treasuries this morning?

Thanks.
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Re: The Bond Dream Room

Post by dualstow » Mon Jul 23, 2018 11:18 am

bedraggled wrote:
Mon Jul 23, 2018 10:46 am
What's up with the decline in 30-year Treasuries this morning?

Thanks.
I don't know if it's the only factor, but the WSJ says "on concerns of falling demand from abroad."
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Re: The Bond Dream Room

Post by Kriegsspiel » Mon Jul 23, 2018 11:26 am

I did notice that Russia dumped something like $50 billion of Treasuries recently in favor of gold. Japan and China both sold billions earlier this year as well, I don't know if that was a one time thing, or net for the year. So at least someone is not demanding them.
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Re: The Bond Dream Room

Post by bedraggled » Mon Jul 23, 2018 11:40 am

Thanks for your prompt, informative response.
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Re: The Bond Dream Room

Post by ochotona » Mon Jul 23, 2018 11:44 am

Side note from another discussion thread - Schwab and Fidelity have the same prices for US Treasury Bonds. Kind of good for bond buyers to know.
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Re: The Bond Dream Room

Post by Kriegsspiel » Thu Aug 16, 2018 3:30 pm

Thank goodness for dualstow's signature, or I wouldn't have known I just got some interests.
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Re: The Bond Dream Room

Post by dualstow » Mon Oct 01, 2018 9:55 am

I cannot tell a lie - I unloaded some more long bonds just now. Only keeping a few with really nice yields.
I guess I broke my pp, but I will continue to hold the four components in some proportion. Not going to sell gold or anything.
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Re: The Bond Dream Room

Post by sophie » Tue Oct 02, 2018 8:12 am

Thanks for posting, dualstow.

My bond allocation is still within the band limits. I'm not selling any, but I don't want to buy any either until the Fed decides it's done raising interest rates. Last statement I read says that will be sometime in 2020.
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Re: The Bond Dream Room

Post by Xan » Tue Oct 02, 2018 10:41 am

sophie wrote:
Tue Oct 02, 2018 8:12 am
Thanks for posting, dualstow.

My bond allocation is still within the band limits. I'm not selling any, but I don't want to buy any either until the Fed decides it's done raising interest rates. Last statement I read says that will be sometime in 2020.

Shouldn't those rate hike expectations (at least in theory) be already priced in?
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Re: The Bond Dream Room

Post by Cortopassi » Tue Oct 02, 2018 11:54 am

Call me nuts, but just like gold, I am salivating at adding more bonds to my rebalance in January.
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Re: The Bond Dream Room

Post by buddtholomew » Tue Oct 02, 2018 12:25 pm

sophie wrote:
Tue Oct 02, 2018 8:12 am
Thanks for posting, dualstow.

My bond allocation is still within the band limits. I'm not selling any, but I don't want to buy any either until the Fed decides it's done raising interest rates. Last statement I read says that will be sometime in 2020.
Sophie, the time to buy LTT’s is when the FED is raising interest rates...raise too much and cause a recession. I want to own LTT’s when that cycle begins.
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Re: The Bond Dream Room

Post by sophie » Wed Oct 03, 2018 8:39 am

thanks guys, needed those comments.

I've noticed that the interest rates are priced in just prior to each interest rate increase, but no more than a few weeks in advance. And, one or two more of those quarter point rate increases and we'll have a yield curve inversion. I have no idea what to do when that happens.

Last time there was a yield curve inversion was 2000-2001. Short term rates eventually dropped (when the stock market went down) and 30 years stayed flat until the US government stopped issuing them in 2002. The 20 year rates eventually dropped also, so presumably it would have worked out well to hold the 30 year bonds.

Not to say that will happen again, but rather that it is not automatically a disaster to buy 30 year bonds in a flat yield curve situation.
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Re: The Bond Dream Room

Post by jacksonM » Wed Oct 03, 2018 12:47 pm

Some of my original 30 year LTT's will be hitting the 20 years to maturity mark soon so I'll have to decide whether to sell and repurchase.

Seems to me that it would be an easier thing to do in a rising interest rate environment than the opposite. I wonder how PP'er's dealt with it when they were holding 14% bonds and rates were on the way down. That would have been a tough one to swallow. I think I would have been tempted to hold the 14% bond to maturity.
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Re: The Bond Dream Room

Post by ochotona » Wed Oct 03, 2018 4:57 pm

buddtholomew wrote:
Tue Oct 02, 2018 12:25 pm
sophie wrote:
Tue Oct 02, 2018 8:12 am
Thanks for posting, dualstow.

My bond allocation is still within the band limits. I'm not selling any, but I don't want to buy any either until the Fed decides it's done raising interest rates. Last statement I read says that will be sometime in 2020.
Sophie, the time to buy LTT’s is when the FED is raising interest rates...raise too much and cause a recession. I want to own LTT’s when that cycle begins.
It would be good to have some when the inevitable recession hits
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Re: The Bond Dream Room

Post by ochotona » Wed Oct 03, 2018 7:24 pm

Dear Lord of Bonds
Pray that Thou 10 year mayest hit 5%
As Antonacci sell indicator doth shine like the sun
For the sake of us sinners in cash and intermediates
we pray
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Re: The Bond Dream Room

Post by dualstow » Wed Oct 03, 2018 8:55 pm

ochotona wrote:
Wed Oct 03, 2018 7:24 pm
Dear Lord of Bonds
Pray that Thou 10 year mayest hit 5%
...
For the sake of us sinners in cash and intermediates
...
O0 Good stuff, Ocho.

I still hope that long bonds will soar when stocks come crashing down. I merely gave up some of that protection, or the chance of it, by unloading some bonds. Rising rates are not inevitable, but they sooooo look to be. So much so that I don't mind having just a little extra cash, something that will not soar, but won't sink either.

The strange thing is that I still feel fine at 50% stocks (vp + pp), even after checking what a 50% haircut would look like. (That is, 50% of 50% of my entire savings. A 25% haircut overall). I guess that's recency bias, or at least the psychological pull of recency. When it happens for real, I'm going to be ill.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by barrett » Thu Oct 04, 2018 5:36 am

Just jumping in to say that not all recessions are deflationary. One can't necessarily count on bond yields going down (and prices going up) uniformly across a recessionary cycle.
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Re: The Bond Dream Room

Post by Cortopassi » Thu Oct 04, 2018 8:43 am

My rebalance numbers just had TLT pass Gold/Silver in the amount that has to be put toward the assets to rebalance back to their level.

Since TLT is 25% and G+S is 30% for me, sure means bonds have been sucking lately.
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Re: The Bond Dream Room

Post by tim47 » Mon Nov 26, 2018 8:38 am

Has anyone heard of Street Shares Veteran Business Bonds that cap at 5%? Seems too good to be true. Comments?
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