I agree with you on the idea. I have a slightly different/shifted timeline in mind. I believe that rates will go higher in H2 this year…as the US govt has to refinance 7T in bonds and issue about 2T in new bonds. Lots of supply coming in…much higher than any time in recent US history. TLT will go much lower than the current mid $80s. That might be an interesting starting point to take a position in US bonds. Always enjoy the content, ideas and writings that you guys put out Cheers!
chatgpt says you are right on the front end of that, until run away inflation kicks in:
“If the Fed really does “print more money” via open-ended QE, and markets believe inflation will stay under control (or that the Fed will hold real rates very low), long yields tend to collapse and TLT performs strongly. Conversely, if that same “money printing” leads markets to fear higher medium‐ to -long-run inflation or if supply outpaces Fed purchases, yields can rise and TLT will underperform.”
inflation lags. don't just look at a snapshot in time right now. put on the druck hat and let's think about where we are 18-24 months, or even 5-10 years out.
I agree with you on the idea. I have a slightly different/shifted timeline in mind. I believe that rates will go higher in H2 this year…as the US govt has to refinance 7T in bonds and issue about 2T in new bonds. Lots of supply coming in…much higher than any time in recent US history. TLT will go much lower than the current mid $80s. That might be an interesting starting point to take a position in US bonds. Always enjoy the content, ideas and writings that you guys put out Cheers!
Wouldn't SGOV (short term treasuries) offers better risk/reward? Still paying 4% with no duration risk.
Boomers are dying and you are buying long dated bonds lmao
Why would this matter?
Playing with macro fire. Be careful. I wish you luck.
It is less than 10% of my portfolio, but thank you.
bonds are dead because we have to keep inflating to get out of the debt death spiral. so the 5% nominal won't turn into any purchasing power...
any some point, the large debt cycle (70 years according to dalio) has to unwind somehow.
and that time will be different...famous last words ;)
So why is inflation well below treasury yields right now?
wait until we print print print to get rid of the current debt. it's not going to pay for itself :)
You think if we "print print print" that TLT is going to perform poorly?
chatgpt says you are right on the front end of that, until run away inflation kicks in:
“If the Fed really does “print more money” via open-ended QE, and markets believe inflation will stay under control (or that the Fed will hold real rates very low), long yields tend to collapse and TLT performs strongly. Conversely, if that same “money printing” leads markets to fear higher medium‐ to -long-run inflation or if supply outpaces Fed purchases, yields can rise and TLT will underperform.”
I don't care what ChatGPT thinks
inflation lags. don't just look at a snapshot in time right now. put on the druck hat and let's think about where we are 18-24 months, or even 5-10 years out.