Long TLT

While I think treasuries are a terrible long term investment I am long TLT for a trade.

7 comments:

Onlooker said...

Yes, between the very negative sentiment for bonds (a plethora of mainstream coverage of late about rising rates), and the likely bounce if we ever get the stock market to correct, makes a short term case for bonds here.

Chaos! said...

Might be the same bet as short SPY at this point.
I'm in too.

nicasurfer said...

nice call on TLT

Onlooker said...

Ugh! It's fallen out of bed (again) since you posted this. If the damned stock market would just crack maybe bonds could find some support.

Tsachy Mishal said...

Chaos!,

They are the same trade until a point. In an interest rate sensitive economy eventually higher rates become a problem. I think we are in that type of environment now with such high debt levels. And I think we are nearing the point where higher rates become a problem.

Tsachy Mishal said...

Onlooker,

Unfortunately it looks like I should have waited. This feels like a panic where we will get swoosh lower followed by a swoosh higher. Hopefully, I am still around for the swoosh higher.

Onlooker said...

Yeah, I hear ya. I'm in the trade with you, FWIW, so I agree. Now that the market's cracking a bit MAYBE we'll get that bounce in bonds, eh?

I just think that the "fact" that rates are going higher is too well known out there. It's obvious at this point and therefore not likely to be the good trade short term. We've had enough rate scare lately to get some retail headed for the doors, I'm sure.

And it goes hand in hand with a stock market correction and a tamping down of all the "recovery is coming" rhetoric of late.