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 » Mon Nov 26, 2018 5:11 pm

tim47 wrote:
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?
Any investment that plays on emotions and affiliations, like "veterans" or "woman owned" or "whites only" or "blacks only" or "'Murica" or "Allahu Akbar" should be avoided. Bernie Madoff's victims were members of his and other synagogues.

It's about cash flows, not emotional manipulations.

Typo error on website. Stay away. "While you support American small businss owners"

Fidelity® Capital & Income Fund pays 4.4% dividend. But... it's Junk Bonds. You OK with Junk Bonds?
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Re: The Bond Dream Room

Post by Kriegsspiel » Mon Nov 26, 2018 7:48 pm

ochotona wrote:
Mon Nov 26, 2018 5:11 pm
Typo error on website. Stay away. "While you support American small businss owners"
They can recover from that. I'm thinking a new ad with raucous "USA! USA!" chants looped over the fluttering Stars and Stripes. Say, 7-9 minutes long.
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Re: The Bond Dream Room

Post by dualstow » Tue Nov 27, 2018 8:26 am

ochotona wrote:
Mon Nov 26, 2018 5:11 pm
Typo error on website. Stay away.

Hah, you sound like me.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by ochotona » Wed Nov 28, 2018 8:03 pm

Today Kathy Jones of Schwab is suggesting investors buy bonds with 2 to 7 years duration, previously she was suggesting 2 to 5 years.
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Re: The Bond Dream Room

Post by dualstow » Thu Nov 29, 2018 6:44 am

ochotona wrote:
Wed Nov 28, 2018 8:03 pm
Today Kathy Jones of Schwab is suggesting investors buy bonds with 2 to 7 years duration, previously she was suggesting 2 to 5 years.
You can find a pundit for every duration and permutation.
RIP Marcello Gandini
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Thu Nov 29, 2018 4:54 pm

Kathy is the guru for bond prudence and reasonableness. If you follow her your bond regrets will be rare. Budd would like her advice, for example.
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Re: The Bond Dream Room

Post by buddtholomew » Thu Nov 29, 2018 5:22 pm

ochotona wrote:
Thu Nov 29, 2018 4:54 pm
Kathy is the guru for bond prudence and reasonableness. If you follow her your bond regrets will be rare. Budd would like her advice, for example.
Thanks, but bonds don't scare me at all since I can manage duration to 5.6 years and have done so since portfolio inception.
That seems to fall nicely between 2 and 7 :)

As an aside I have tracked BND (VG Bond Index ETF) and LTT/Cash (5.6 years) performance and the daily differences are negligible.
Personally I just prefer cash so the barbell over bullet strategy works for me.
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Re: The Bond Dream Room

Post by dualstow » Thu Nov 29, 2018 7:07 pm

ochotona wrote:
Thu Nov 29, 2018 4:54 pm
Kathy is the guru for bond prudence and reasonableness. If you follow her your bond regrets will be rare. Budd would like her advice, for example.
I have no regrets about my pp bond holdings.
RIP Marcello Gandini
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Re: The Bond Dream Room

Post by dualstow » Thu Feb 07, 2019 10:06 am

The next Fed move may be an interest rate cut. Interesting.
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Re: The Bond Dream Room

Post by pmward » Thu Feb 07, 2019 10:48 am

Yeah there are a lot of people betting on a cut right now, which is why yields have fallen so sharply over the last few weeks. We will see. Powell was against being so aggressive on both quantitative easing and low interest rates a few years back, it would be very surprising to see him be the one to continue back down that path. But anything could happen. Personally, I have enjoyed getting some actual noticeable interest off of money markets.
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Re: The Bond Dream Room

Post by dualstow » Thu Feb 07, 2019 11:49 am

Oh, me too.
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Re: The Bond Dream Room

Post by ochotona » Wed Mar 27, 2019 6:47 pm

OMG bonds are on fire. I'm looking at the chart for SCHR, which is a 5 year bond ETF. Oversold on a daily and weekly basis, it looks like a bubble to me. I think it's time to take some profits, like tomorrow.
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Re: The Bond Dream Room

Post by pmward » Wed Mar 27, 2019 6:59 pm

I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
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Re: The Bond Dream Room

Post by ochotona » Wed Mar 27, 2019 8:14 pm

pmward wrote:
Wed Mar 27, 2019 6:59 pm
I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
Thanks, I set an alarm to go off when a tight trailing stop is violated. Also have 15 20 30 day moving average alarms. And I put in a price point by hand. I have US Treasuries, so I have to sell them by hand. SCHR is a proxy I am using for the alarms.

Do you think when the bond trend breaks it could also mean the point when stocks start heading higher? Might be nice to sell bonds / buy stocks based on the same signal, when risk-on comes back.
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Re: The Bond Dream Room

Post by pmward » Wed Mar 27, 2019 9:34 pm

ochotona wrote:
Wed Mar 27, 2019 8:14 pm
pmward wrote:
Wed Mar 27, 2019 6:59 pm
I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
Thanks, I set an alarm to go off when a tight trailing stop is violated. Also have 15 20 30 day moving average alarms. And I put in a price point by hand. I have US Treasuries, so I have to sell them by hand. SCHR is a proxy I am using for the alarms.

Do you think when the bond trend breaks it could also mean the point when stocks start heading higher? Might be nice to sell bonds / buy stocks based on the same signal, when risk-on comes back.
These markets are very hard to read right now. Every day is throwing different signals, and the intra-day price swings lately have been very unsure; lots of reversal days. So it's hard to say. The bond market is the only market that is trending right now. I would have a hard time making a large stock purchase right now. Even if we finally break the 2820 resistance level, last January's highs of ~2870, and the all time highs of 2940 are both so close, there's just so much overhead resistance. I have a hard time believing we will break through all of them without some kind of catalyst. But anything could happen and I could be wrong, the markets are rarely, if ever, rational. I also see bearishness being the popular view these days, which is actually leading me to think we might have one more gravity defying blow off top left in the tank. Market tops happen at the point of peak bullishness, and I just don't see that right now. So it has me starting to second guess my own bearishness, at least in the near term.

Now you're seeing how stressful it is to try to market time. This was why I stopped and decided to convert to a buy and hold GB. It's harder to decide to get back in than it is to decide to get out. My life is so much less stressful now. If I feel very strongly about getting out of the market in the future, I'll keep those bets to the 20% small cap allocation (VP) of my GB and keep the 80% that's in my PP in place so I don't shoot myself in the foot if I'm wrong. I think Harry had a lot of wisdom in having a separate PP that is always invested, and a separate VP that you can play, speculate, trend follow, or whatever with.
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Re: The Bond Dream Room

Post by ochotona » Thu Mar 28, 2019 10:34 am

It's the 3-5 year bonds that are on fire now. Glad I looked. I'll keep 0-2 years, keep 6+, and think about selling in the middle.
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Re: The Bond Dream Room

Post by ochotona » Thu Apr 18, 2019 6:39 pm

ochotona wrote:
Thu Mar 28, 2019 10:34 am
It's the 3-5 year bonds that are on fire now. Glad I looked. I'll keep 0-2 years, keep 6+, and think about selling in the middle.
Yesterday the Schwab Bond Lady Kathy Jones recommended 2 yr / 7 yr barbell... sell the 5 yr. Great minds think alike, I guess. I sold SCHR (5), and bought SCHO (2) and IEF (7.5) (now fee-free at Schwab... yahoo!)
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Re: The Bond Dream Room

Post by ochotona » Fri Apr 26, 2019 8:25 am

Dr. Lacy Hunt has his clients in 20+ year UT Treasuries. He thinks we're going back to 0% interest rates, and low long term rates for a long time. Japan scenario. The title of the podcast is click-bait, as he doesn't think MMT has a significant chance of being adopted.

https://www.macrovoices.com/550-dr-lacy ... nflation-2
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Re: The Bond Dream Room

Post by ochotona » Tue May 07, 2019 1:09 pm

Gunlach had a good insight, he said the inversion of the yield curve indicates the bond market thinks growth will slower than in the 3 year time window.

Yields for 1 2 3 5 7 10 20 30 year bonds:

2.39 2.31 2.27 2.30 2.40 2.51 2.73 2.91
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Re: The Bond Dream Room

Post by dualstow » Mon May 13, 2019 9:03 am

No talk about China's threat to dump treasuries?
Well, I guess this has been thoroughly explored over the years.

I do wish MediumTex were here.
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Re: The Bond Dream Room

Post by pmward » Mon May 13, 2019 9:16 am

dualstow wrote:
Mon May 13, 2019 9:03 am
No talk about China's threat to dump treasuries?
Well, I guess this has been thoroughly explored over the years.

I do wish MediumTex were here.
There's a short squeeze going on with dollars internationally right how, which is why the dollar has been shooting up lately. The Eurodollar markets have been really tight, and this is the market where almost all international U.S. dollar currency for trade is acquired. By China selling it actually would be a good thing, as it would add extra supply to balance out the demand and allow the dollar to pull back which would be a very good thing. Funny thing is Trump has been wanting the dollar to drop, so their threat is actually helps Trump's agenda, so it's not much of a threat at all. Also, it could help bond yields to get up off of the ground, another really good thing.
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Re: The Bond Dream Room

Post by dualstow » Mon May 13, 2019 9:37 am

I doubt they'll sell anyway. It's just talk.
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Re: The Bond Dream Room

Post by pmward » Mon May 13, 2019 11:16 am

Yep, more than likely. Also, one needs to think that if they do sell en masse it would drop the price, which would in turn hurt them as well. I think odds are they just let what they own mature vs selling, and only buy as much as they need for trade. They've been building gold for years now, and my thoughts have always been that the reason was to reduce their USD reserves.
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Re: The Bond Dream Room

Post by pmward » Wed May 15, 2019 9:13 am

We are like .5% away in TLT from setting a higher high. Combined with the higher low we set in the pullback over the last couple of months, that would officially be a confirmed new up trend. Who would have thought a year ago when they were raising rates like crazy that we would be potentially entering a new official uptrend in long treasuries now?
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Re: The Bond Dream Room

Post by Pet Hog » Wed May 15, 2019 3:39 pm

pmward wrote:
Wed May 15, 2019 9:13 am
Who would have thought a year ago when they were raising rates like crazy that we would be potentially entering a new official uptrend in long treasuries now?
I think there are many members of this forum who didn't (and still don't) believe "there's nowhere for rates to go but up!"TM I'm happy that I got to add to my STTs at about 2.5%, but my expectation is that they will return to near-zero soon. But I'm happy to be a PP investor and not make predictions.
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