The Bond Dream Room

[dualstow]

Love the cat, btw. I have a lovely spotted tabby myself.

[yankees60]

Love the cat, btw. I have a lovely spotted tabby myself.

You reminded me of something I've wanted to ask. But rather than start it as a tangent here I WILL introduce it as a NEW topic.

Vinny

[boglerdude]

eli5 these emails I get from treasurydirect:

"Press Releases: https://www.treasurydirect.gov/instit/a ... 1120_1.pdf
Regulations for the operation are also available on our website at http://www.treasurydirect.gov/instit/st ... /bbreg.htm
This e-mail notifies you that the Bureau of the Fiscal Service just issued press releases concerning a debt buyback of Treasury securities. Clicking on the addresses listed after “Press Releases” should take you to the Bureau of the Fiscal Service's Internet pages of PDF versions of the actual press releases."

[dualstow]

Since this isn’t reddit, you might want to e what eli5 means, otherwise you’re going to get two pages of jackson and vinny asking what it means before you get a response.

[dualstow]

Most of the time, it feels like gold's gains are fleeting.

Bonds on the other hand, really do zig when stocks zag, and profits don't evaporate the next day.
Feels good to own the pp today.

[boglerdude]

Anybody got junk bonds?

I have a dollop of FALN, downgraded bonds that institutions cant buy. And bogleheads shun. Buy whats hated right? Or am I convincing myself of the narrative...

[dualstow]

Anybody got junk bonds?

I have a dollop of FALN, downgraded bonds that institutions cant buy. And bogleheads shun. Buy whats hated right? Or am I convincing myself of the narrative...

Buy what’s hated, of quality assets.
What % of your total is in junk?

[boglerdude]

5% so prob doesnt make a difference.

Junk- stock- totalbond- emerging- gold- longtreasury



Hrm. Maybe if the 30yr pops to 3% after the election, like last time, ill move to that.

[sophie]

Wow, the 30 year has now dropped below 2%!

If the 30 year pops up above 3% later this year, that will give me the chance to swap my taxable 3.125% bond that's gained > 25% and is coming up on the 20 year mark (in 2021) for a new 30 year vintage. That would be quite an increase though...still thinking I'm either going to have to donate that holding to my DAF, or suck up the capital gains tax.

Or, perhaps I could put it into the "variable portfolio" and just enjoy the interest payments. What are all of you guys planning to do with your individually held long bonds when they're no longer long?

[dualstow]

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?
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.

[Kbg]

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.

[dualstow]

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.

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%.

[Kbg]

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).

[dualstow]

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?

[dualstow]

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!

[pmward]

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.

[Ad Orientem]

30 year munis yielding 1.6%. I need to lie down.

[Kriegsspiel]

Yea it's getting pretty silly.

[Ad Orientem]

Ten year US Bonds now at 1.25%.

https://www.cnbc.com/2020/02/27/treasur ... rsist.html

[Cortopassi]

Well at least bonds are holding. I am finding gold's response the past two days a bit strange.

[dualstow]

Well at least bonds are holding. I am finding gold's response the past two days a bit strange.

Have you two met?


(You and gold, I mean)

[Don]

Well at least bonds are holding. I am finding gold's response the past two days a bit strange.

It's almost as if someone was manipulating the markets and sold their gold position today, right before stocks late day rally. Soros?

[Ad Orientem]

The volume of market activity is too high for that kind of manipulation. I it were attempted it would have to be on a scale that could not be camouflaged.

[pmward]

Wow did that escalate quickly. Look at the yield curve now after the cut: https://fixedincome.fidelity.com/ftgw/fi/FILanding

1.03% on the 3 month. .77% on the 2 year. 1.04% on the 10 year. 1.64% on the 30 year. So crazy. At least they uninvited the 90/10 and 2/10 that are most widely followed. But still some pretty extreme inversions on the short to medium range.

[Ad Orientem]

The 10 yr T bond has broken below 1%. I said it before and I stand by it. The bond market no longer inhabits the same plane of reality that I am living in.