The Lemon Fool

Well, they can only really go one way. It's just a matter of 'when' surely?!
I've been looking at bonds for a while as I want to get my cash float in the ISA working, but nothing appeals... Current area of interest (no pun intended) is the iShares ERNS ultrashort bond ETF but trying to get my head round what the effects of an interest rate rise would be

A bond bloodbath could be a good time to hold bonds ...

... because rising interest rates would also slash the prices of the two Really Big Things most people buy in a lifetime: the house, and the pension. The latter could mean annuities rising to a level worth considering again.

That scares politicians. I expect they'll go on debasing the coin ever more to prevent that bloodbath until long after it's too late to prevent something far worse.

Snorvey wrote:Are we headed for a bond market bloodbath?

Pretty dramatic stuff from the BBC.

http://www.bbc.co.uk/news/business-39325794

Pardon my skepticism, but I think you are six months too late. Surely, the bloodbath has just happened. US yields have risen 100bp right across the yield curve while simultaneously shares have jumped 20%. That represents a -40% relative performance for long bonds.US yields are now a healthy 2.5% or so and I am again buying.


GS

Are we headed for a bond market bloodbath?

Pretty dramatic stuff from the BBC.

It's the BBC. Of course it's dramatic.

They're great for period dramas and wild life programmes, but for anything serious, they tend to resemble the VIZ comic.


Steve

GoSeigen wrote:Pardon my skepticism, but I think you are six months too late. Surely, the bloodbath has just happened. US yields have risen 100bp right across the yield curve while simultaneously shares have jumped 20%. That represents a -40% relative performance for long bonds.US yields are now a healthy 2.5% or so and I am again buying. GS

What do you think of TIPS at the moment, GS?

GoSeigen wrote:

Snorvey wrote:Are we headed for a bond market bloodbath?

Pretty dramatic stuff from the BBC.

http://www.bbc.co.uk/news/business-39325794

Pardon my skepticism, but I think you are six months too late. Surely, the bloodbath has just happened. US yields have risen 100bp right across the yield curve while simultaneously shares have jumped 20%. That represents a -40% relative performance for long bonds.US yields are now a healthy 2.5% or so and I am again buying.


GS

Pardon my scepticism of your scepticism, GS, but you do come across as a bit of a one-trick pony when it comes to assets, i.e. buy gilts, sell equities. Remember the 'start of a bear market' in equities you were predicting when the FTSE100 was around 5500 last year? Still waiting for an acknowledgement that you were completely wrong, as defined by that bear market not materialising before end 2016. Or are you still waiting?

BoE

Bubblesofearth wrote:
Pardon my scepticism of your scepticism, GS, but you do come across as a bit of a one-trick pony when it comes to assets, i.e. buy gilts, sell equities. Remember the 'start of a bear market' in equities you were predicting when the FTSE100 was around 5500 last year? Still waiting for an acknowledgement that you were completely wrong, as defined by that bear market not materialising before end 2016. Or are you still waiting?

BoE

Lookingforclues by any chance?

If so, and you want to continue the previous discussion, it would be nice to introduce yourself and for everyone's benefit recap the full context you're referring to, perhaps even on a new thread?!

If not, then who are you?


GS

Kantwebefriends wrote:

GoSeigen wrote:Pardon my skepticism, but I think you are six months too late. Surely, the bloodbath has just happened. US yields have risen 100bp right across the yield curve while simultaneously shares have jumped 20%. That represents a -40% relative performance for long bonds.US yields are now a healthy 2.5% or so and I am again buying. GS

What do you think of TIPS at the moment, GS?

Sorry, really couldn't give any sensible answer as I do not follow them closely enough.

GS

GoSeigen wrote:

Bubblesofearth wrote:
Pardon my scepticism of your scepticism, GS, but you do come across as a bit of a one-trick pony when it comes to assets, i.e. buy gilts, sell equities. Remember the 'start of a bear market' in equities you were predicting when the FTSE100 was around 5500 last year? Still waiting for an acknowledgement that you were completely wrong, as defined by that bear market not materialising before end 2016. Or are you still waiting?

BoE

Lookingforclues by any chance?

If so, and you want to continue the previous discussion, it would be nice to introduce yourself and for everyone's benefit recap the full context you're referring to, perhaps even on a new thread?!

If not, then who are you?


GS

Haha, yes, I did mean to say that I'd changed my user name but never got round to it. My bad. No need for a new thread as my comment is entirely pertinent to this one as it has to do with putting some context around your scepticism of bearish comments about gilts. The context is your now long-standing preference for gilts over equities and the fact, as exemplified by what has happened to the two asset classes over the last year, that this preference is not always the best strategy.

It is a slight tangent to comment on your pledge to say you were wrong if the equity bear market did not materialise by end 2016 but I'm happy to let that go rather than bore everyone with a new thread.

BoE (formerly lfc)

Bubblesofearth wrote:

GoSeigen wrote:The context is your now long-standing preference for gilts over equities and the fact, as exemplified by what has happened to the two asset classes over the last year, that this preference is not always the best strategy.

Their is no strategy on earth that you can expect to be a universal best strategy measured over an arbitrary short period.

Dunno about GS but gilts did very well for us when we held them. We don't now because the outlook seems to me to be gloomy. I'm not too sunny about the outlook for equities either, especially in the US.

There used to be an investment manager who wrote about the wonders of holding gilts: David Kauders. Every year I'd take a newspaper cutting and write on it "for how long can Kauders prove to be right?" He proved to be right for getting on for twenty years. Does anyone have access to his current writings? He seems to have cleared off to Switzerland: the most recent thing I've seen is this.
http://www.telegraph.co.uk/investing/sh ... it-crunch/

Bubblesofearth wrote:Pardon my scepticism of your scepticism, GS, but you do come across as a bit of a one-trick pony when it comes to assets, i.e. buy gilts, sell equities. Remember the 'start of a bear market' in equities you were predicting when the FTSE100 was around 5500 last year? Still waiting for an acknowledgement that you were completely wrong, as defined by that bear market not materialising before end 2016. Or are you still waiting?

[...]

Haha, yes, I did mean to say that I'd changed my user name but never got round to it. My bad. No need for a new thread as my comment is entirely pertinent to this one as it has to do with putting some context around your scepticism of bearish comments about gilts. The context is your now long-standing preference for gilts over equities and the fact, as exemplified by what has happened to the two asset classes over the last year, that this preference is not always the best strategy.

It is a slight tangent to comment on your pledge to say you were wrong if the equity bear market did not materialise by end 2016 but I'm happy to let that go rather than bore everyone with a new thread.

BoE (formerly lfc)

Hi, we meet again, then! I'll stick to the thread topic here, but answer the other stuff elsewhere when I get a moment.


So first, I'm sorry if I come over as a one trick pony. My feeling is that I post about a variety of my investments and strategies, including bank bonds and equities, other distressed and corporate debt, options, hedging and the like. So either you have missed many of those posts or I have underestimated the extent to which my "one trick pony" posts spamp the remainder!

Even accepting the above premise, I think it's slightly in accurate in that I'm sure I've documented my gradual reduction of gilt holdings over recent years and my preference for cash or hedged share-picking. When did I last advocate any overweight position in gilts for example? Certainly I've been a net seller for some years having been heavily overweight from 2007. Nevertheless, I still believe equities are expensive and risky, at the same time not sharing the armageddon-style views about gilts and other sovereign bonds that are sometimes posted on these boards.

With respect to your comments about this thread and gilts, it was my understanding that the OP linked to an article about treasuries with photo of Janet Yellen and all, and my post was about US treasuries and how I have been buying. I don't think I mentioned gilts at all. Did you miss that, or were you just taking the chance to have a go?!!



GS

GoSeigen wrote:

Bubblesofearth wrote:Pardon my scepticism of your scepticism, GS, but you do come across as a bit of a one-trick pony when it comes to assets, i.e. buy gilts, sell equities. Remember the 'start of a bear market' in equities you were predicting when the FTSE100 was around 5500 last year? Still waiting for an acknowledgement that you were completely wrong, as defined by that bear market not materialising before end 2016. Or are you still waiting?

[...]

Haha, yes, I did mean to say that I'd changed my user name but never got round to it. My bad. No need for a new thread as my comment is entirely pertinent to this one as it has to do with putting some context around your scepticism of bearish comments about gilts. The context is your now long-standing preference for gilts over equities and the fact, as exemplified by what has happened to the two asset classes over the last year, that this preference is not always the best strategy.

It is a slight tangent to comment on your pledge to say you were wrong if the equity bear market did not materialise by end 2016 but I'm happy to let that go rather than bore everyone with a new thread.

BoE (formerly lfc)

Hi, we meet again, then! I'll stick to the thread topic here, but answer the other stuff elsewhere when I get a moment.


So first, I'm sorry if I come over as a one trick pony. My feeling is that I post about a variety of my investments and strategies, including bank bonds and equities, other distressed and corporate debt, options, hedging and the like. So either you have missed many of those posts or I have underestimated the extent to which my "one trick pony" posts spamp the remainder!

Even accepting the above premise, I think it's slightly in accurate in that I'm sure I've documented my gradual reduction of gilt holdings over recent years and my preference for cash or hedged share-picking. When did I last advocate any overweight position in gilts for example? Certainly I've been a net seller for some years having been heavily overweight from 2007. Nevertheless, I still believe equities are expensive and risky, at the same time not sharing the armageddon-style views about gilts and other sovereign bonds that are sometimes posted on these boards.

With respect to your comments about this thread and gilts, it was my understanding that the OP linked to an article about treasuries with photo of Janet Yellen and all, and my post was about US treasuries and how I have been buying. I don't think I mentioned gilts at all. Did you miss that, or were you just taking the chance to have a go?!!



GS

Maybe a bit harsh to call you a one-trick pony as I am aware you have gradually gone from bullish gilts, bearish equities to more neutral gilts, bearish equities. Human nature plus a dash of laziness to put people in boxes I guess. I get the same, many see me as a perennial equity bull even though I'm now very skittish at the levels seen recently.

BoE

Some of these forecasting muppets remind me of the SNP. Keep playing the same tune and eventually you'll get the answer you want.