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Re: The Bond Dream Room
Posted: Tue Dec 30, 2014 11:08 am
by moda0306
1NV35T0R (Greg) wrote:
aww they are almost there hah. I will admit, it did take me some thinking at one point to understand how the bond yield could affect price so much.
I had the "LT.bond aha moment" once in college studying how to account for bonds using "General Accounting Principles."
I was immediately interested and a tad taken aback at how bonds worked unintuitively. I found it so much more appealing than the alpha/beta/ratio stock pricing business.... Which seemed a lot more prone to unknown variables.
It wasn't until 2008 hit that I saw how well LTT's did and felt like I'd just discovered a new element. At that point, all I'd heard about LT bonds was "careful... When rates rise you'll lose your shirt."
Not that bonds are a superior asset class... But its a shame more people don't see them for their diversification benefit.
Re: The Bond Dream Room
Posted: Sun Jan 04, 2015 5:41 pm
by dualstow
moda0306 wrote:
I had the "LT.bond aha moment" once in college studying how to account for bonds using "General Accounting Principles."
Well you're way ahead of me. I didn't know the investing world existed outside of stocks and lottery tickets when I was in college.
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 11:43 am
by dualstow
Ho hum, another 300-point drop in the Dow and 1+% gain in LT treasuries.
TLT breaching 129...
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 2:08 pm
by moda0306
dualstow wrote:
Ho hum, another 300-point drop in the Dow and 1+% gain in LT treasuries.
TLT breaching 129...
I love when TLT does "its thing."
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 2:14 pm
by goodasgold
I feel sorry for all those folks, years ago, who stampeded out of bonds because the Wall Street "experts" told them that "bond rates have nowhere to go but up."
Well, they will go up some day, but in the meantime I am harvesting the rewards of St. Harry B's well-known scripture: chapter 4, verse 25, also known as 4X25.
Amen.
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 2:53 pm
by buddtholomew
Nice to see gold stepping up as well. To be honest, I would rather have gold outpace treasuries as yields have no where to go but up
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 2:57 pm
by Lang
Swiss government bonds also went up significantly today, bringing yields to historic lows.
50 year yield - 0.744%
30 year yield - 0.666%
10 year yield - 0.280%
up to 6 year yields - negative.
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 3:52 pm
by Reub
goodasgold wrote:
I feel sorry for all those folks, years ago, who stampeded out of bonds because the Wall Street "experts" told them that "bond rates have nowhere to go but up."
Well, they will go up some day, but in the meantime I am harvesting the rewards of St. Harry B's well-known scripture: chapter 4, verse 25, also known as 4X25.
Amen.
Yes, Amen! Let's also give MediumTex some credit because he has been a huge proponent of long bonds over the past few years as an important part of the overall portfolio. I sure wish him well!
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 3:53 pm
by Reub
What happens when the yield curve flattens like a pancake and possibly inverts? Is it the Big Boom?
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 4:19 pm
by dualstow
Reub wrote:
What happens when the yield curve flattens like a pancake
Add chocolate chips and syrup.
Re: The Bond Dream Room
Posted: Mon Jan 05, 2015 8:59 pm
by MachineGhost
Reub wrote:
What happens when the yield curve flattens like a pancake and possibly inverts? Is it the Big Boom?
Not if the Fed has anything to say about it!
Re: The Bond Dream Room
Posted: Tue Jan 06, 2015 1:55 am
by Lang
Reub wrote:
What happens when the yield curve flattens like a pancake and possibly inverts? Is it the Big Boom?
New Zealand now has a very, very flat yield curve:
http://www.investing.com/rates-bonds/ne ... ity_to=180
They don't i ssue bonds with maturity greater than 10 years, though.
Re: The Bond Dream Room
Posted: Tue Jan 06, 2015 5:29 pm
by Alanw
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
Re: The Bond Dream Room
Posted: Tue Jan 06, 2015 9:35 pm
by barrett
Bond yields going this low has certainly been an education for me. I sold a few when the yield first dipped below 3% and thought I was some kind of market timing genius. So I was a shade underweighted in LTTs the last couple months only to see them recently pull even with my stock and gold holdings.
Re: The Bond Dream Room
Posted: Wed Jan 07, 2015 3:07 am
by Lang
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up.
Well, they have nowhere to go but up if they are zero, although there are some strange cases of bonds trading at negative yields.
Switzerland has a 12 year bond trading at a yield to maturity of 0.3%. Even if the yield drops to 0%, the capital gain on that bond will be a measly 3%. Is this really worth the downside risk?
Re: The Bond Dream Room
Posted: Wed Jan 07, 2015 4:37 am
by murphy_p_t
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
why not?! dont markets largely move in tandem globally?
Re: The Bond Dream Room
Posted: Wed Jan 07, 2015 12:10 pm
by Alanw
murphy_p_t wrote:
Alanw wrote:
And we've been told the last several years that interest rates had nowhere to go but up. Are US treasury yields heading toward Germany, Great Britain and Japan type yields?
why not?! dont markets largely move in tandem globally?
How many forum members at the beginning of 2014 thought long bonds would be the big PP portfolio winner for the year? If the US bond market follows global markets, we may have more upside. Could LTT's be the big winner again in 2015?
Re: The Bond Dream Room
Posted: Wed Jan 07, 2015 2:17 pm
by Reub
Our bond yields look high if you're in Europe or even Japan.
Re: The Bond Dream Room
Posted: Wed Jan 07, 2015 3:10 pm
by murphy_p_t
"Could LTT's be the big winner again in 2015?"
I wouldn't bet against it...
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 10:54 am
by DragonJoey3
30 year treasuries at all time low interest rate today. Happy Friday everyone!
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 12:16 pm
by barrett
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 12:44 pm
by buddtholomew
barrett wrote:
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
barrett, what, if anything, are you doing with your long-term treasury holdings? I have been tempted 6 out of the last 5 trading sessions to sell a portion and harvest some gains. I continue to sit tight as reducing my exposure to less than 25% could strain the performance of the PP if equities and/or gold declines. 30%+ gains are difficult to ignore if you believe in reversion to the mean. Alternatively, we have international investors purchasing our bonds to drive yields lower as US rates are significantly higher than international development countries. The higher dollar is icing on the cake.
SPY 27.10%
GLD 22.49%
TLT 24.50%
CSH 25.90%
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 1:02 pm
by dragoncar
buddtholomew wrote:
barrett wrote:
Fascinating to see this. I hope bedraggled forgives me for talking him out of loading way up on LTTs when they were at 3%. When I bought LTTs for the first time last year through TD Aneritrade, the guy who was taking me through the steps on their website said, "Er, I wouldn't buy those things if I were you."
barrett, what, if anything, are you doing with your long-term treasury holdings? I have been tempted 6 out of the last 5 trading sessions to sell a portion and harvest some gains. I continue to sit tight as reducing my exposure to less than 25% could strain the performance of the PP if equities and/or gold declines. 30%+ gains are difficult to ignore if you believe in reversion to the mean. Alternatively, we have international investors purchasing our bonds to drive yields lower as US rates are significantly higher than international development countries. The higher dollar is icing on the cake.
SPY 27.10%
GLD 22.49%
TLT 24.50%
CSH 25.90%
Dude just leave it alone :-)
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 1:05 pm
by buddtholomew
That's the same advice I would give to someone posing the same question. Dude...chill...
Re: The Bond Dream Room
Posted: Fri Jan 23, 2015 1:13 pm
by dragoncar
buddtholomew wrote:
That's the same advice I would give to someone posing the same question. Dude...chill...
Well if you absolutely
must tinker, here's what I suggest:
You currently have:
SPY 27.10%
GLD 22.49%
TLT 24.50%
CSH 25.90%
Bonds are way up recently, so you should sell those.
Now you have:
SPY 27.10%
GLD 22.49%
CSH 50.4%
As you know, the S&P is flirting with all-time highs. So sell those too.
Now you have:
GLD 22.49%
CSH 77.5%
You, more than anyone, know what a pain in the ass gold is. It's tanked quite a bit over the last few years. Best be rid of it.
Now you have:
CSH 100%
The downside to holding all this cash is the coming hyperinflation of the USD. So you should sell that too. I'll buy it all for a six-pack of beer.
Now you have:
Beer
Drink the beer.
