Just made a purchase at 5.088 for 30 year LTTs

Discussion of the Bond portion of the Permanent Portfolio

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Jack Jones
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by Jack Jones »

IMHO using LTT's at all in these circumstances makes no sense.

What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
Last edited by Jack Jones on Wed May 08, 2024 12:55 pm, edited 1 time in total.
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yankees60
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

Jack Jones wrote: Wed May 08, 2024 6:54 am What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
William Bernstein makes the case that the odds are far greater for inflation than deflation.

Since 1900 or so, how many years have had inflation / deflation?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by Jack Jones »

yankees60 wrote: Wed May 08, 2024 10:14 am
Jack Jones wrote: Wed May 08, 2024 6:54 am What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
William Bernstein makes the case that the odds are far greater for inflation than deflation.

Since 1900 or so, how many years have had inflation / deflation?
That would be an argument to have greater insurance against inflation than deflation. But to say that it makes no sense to invest in LTT seems undefended still.
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by ArthurPooh »

Indeed, how many "deflationary depressions" were there in the United States since the end of gold standard? Is this even a real possibility in a fiat-based economy with a central bank that is determined to keep the economy "up" at any cost and that now is quickly traversing the road from quantitative easing through debt monetization to monetary financing?

At this point I believe inflation is not an event to prepare for, it's just a characteristic of a modern economy. When people are pessimistic, it increases prices of gold and other stuff like that. When people are optimistic, it launches corporate white elephants to the stratosphere instead. (This, I think, explains why gold does not always track inflation in the short term). But that torrent of money will not be drying up, and certainly not reverse ever again.
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by mathjak107 »

Jack Jones wrote: Wed May 08, 2024 6:54 am
IMHO using LTT's at all in these circumstances makes no sense.

What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
it reminds me of waiting so long for the ship to come in that the pier collapses .

like peter lynch said , Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
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yankees60
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

Jack Jones wrote: Wed May 08, 2024 1:04 pm
yankees60 wrote: Wed May 08, 2024 10:14 am
Jack Jones wrote: Wed May 08, 2024 6:54 am What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
William Bernstein makes the case that the odds are far greater for inflation than deflation.

Since 1900 or so, how many years have had inflation / deflation?
That would be an argument to have greater insurance against inflation than deflation. But to say that it makes no sense to invest in LTT seems undefended still.
Agree with that. It would say to have some deflation protection?

But isn't it somewhat similar to taking a short on a stock?

Cannot one have unlimited losses on taking a short on a stock? Similarly, when taking a position to protect yourself against deflation but then there is resulting inflation ... will not that magnify the losses from inflation?
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

mathjak107 wrote: Thu May 09, 2024 3:02 am
Jack Jones wrote: Wed May 08, 2024 6:54 am
IMHO using LTT's at all in these circumstances makes no sense.

What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
it reminds me of waiting so long for the ship to come in that the pier collapses .

like peter lynch said , Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
"it reminds me of waiting so long for the ship to come in that the pier collapses ."

Is that a mathjak original? Loved it!

Overall, excellent pithy message by you.

Similar to all the time we worry about possible negative events that never materialize.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by mathjak107 »

Image
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yankees60
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

mathjak107 wrote: Thu May 09, 2024 11:37 am Image
Yes!

You and I are IN TUNE together!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by Dieter »

yankees60 wrote: Thu May 09, 2024 12:08 pm
mathjak107 wrote: Thu May 09, 2024 11:37 am Image
Yes!

You and I are IN TUNE together!
Um, that's why were are here, right?

:)
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yankees60
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

Dieter wrote: Thu May 09, 2024 1:20 pm
yankees60 wrote: Thu May 09, 2024 12:08 pm
mathjak107 wrote: Thu May 09, 2024 11:37 am Image
Yes!

You and I are IN TUNE together!
Um, that's why were are here, right?

:)
Well, we DO seem to have plenty of disagreements of a lot of matters ....
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by boglerdude »

Shrinking working age populations is new. But Feds power to print has never been higher. You had 10 years to buy the real estate dip. One month to buy the lockdown dip and a few months to sell LTTs. Is the Fed gonna juice the economy for November, or are they gonna hand Trump a high rate dumpster fire?
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by ppnewbie »

Purchased some LTTs today at 4.615. Have feeling a missed the peak yield for now which was around 4.81.
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by dualstow »

ppnewbie wrote: Thu May 09, 2024 11:39 pm Purchased some LTTs today at 4.615. Have feeling a missed the peak yield for now which was around 4.81.
I recently got some at about the same rate as you. Unless you have a ton of money, 4.6 is the same as 5%. O0
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

ppnewbie wrote: Thu May 09, 2024 11:39 pm Purchased some LTTs today at 4.615. Have feeling a missed the peak yield for now which was around 4.81.
But how do you feel after catching 96% of that peak? I'd give you a grade of A!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

dualstow wrote: Fri May 10, 2024 7:05 am
ppnewbie wrote: Thu May 09, 2024 11:39 pm Purchased some LTTs today at 4.615. Have feeling a missed the peak yield for now which was around 4.81.
I recently got some at about the same rate as you. Unless you have a ton of money, 4.6 is the same as 5%. O0
Simple math is for each $100,000 annual difference between 5.0% and 4.615% is $385.

But more relevant to the actual circumstances annual difference between 4.81% and 4.615% is $195. So $1,950 on a $1,000,000.

Don't know what your definition / conception is for "a ton of money".
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by dualstow »

Is this Vinny or ChatGPT 3.5?
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by yankees60 »

dualstow wrote: Fri May 10, 2024 12:33 pm Is this Vinny or ChatGPT 3.5?
It's "Classic" Vinny and I resent if ChatGPT 3.5 has adopted imitating my style!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by Jack Jones »

mathjak107 wrote: Thu May 09, 2024 3:02 am
Jack Jones wrote: Wed May 08, 2024 6:54 am
IMHO using LTT's at all in these circumstances makes no sense.

What about insurance for a deflation? If bond interest rates drop significantly, LTT could provide an outsized payoff.
it reminds me of waiting so long for the ship to come in that the pier collapses .

like peter lynch said , Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”
Far more money has been lost by consumers paying for life insurance than has been paid out when they die. It’s still a worthwhile product.

You seem to be arguing that insurance is a bad idea. A better argument would be why deflation isn’t worth insuring against, like the case that Vinny and Arthur made.
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by mathjak107 »

because there are better ways today to get on deflation in lower risk portfolios with much better risk to reward profiles then the pp has proven to provide. in more modern times.

odds of deflation are also very slight . certainly i would never bet the same money on deflation as i would prosperity
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by welderwannabe »

Good time to tax loss harvest the LTT's. Sell those bonds and buy new LTTs with higher coupons. Doing it made me feel a LITTLE better about the losses.
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Re: Just made a purchase at 5.088 for 30 year LTTs

Post by dualstow »

welderwannabe wrote: Thu May 23, 2024 7:25 am Good time to tax loss harvest the LTT's. Sell those bonds and buy new LTTs with higher coupons. Doing it made me feel a LITTLE better about the losses.
+1!
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