42

short term bonds are yielding a little over 5%

which is a nice return.

the one i stick my excess cash in (JPST) is yielding 5.26% with. nice up arrow.

Allan

43

That’s right anyone who held their life savings elsewhere, (stocks, actual cash crypto) but then a short time ago dumped it all and moved it all to short term bonds is now making 5%.

Which is very very very different than saying “Bond investors are doing well. Anyone who was in the 50s and moved into bonds a few years ago made 5%.”

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44

any investor needs luck sometimes. i saw the yield and with one of your famous up arrow and said that is the place for cash for me. now of course what goes up will have to go down, i will ride this puppy until i see negative signs.

Allan

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45

basically as an investor, you have to be flexible and make money when the opportunity presents itself.

Allan

46

Which would explain why Warren Buffett, who invests only bullishly, and normally holds his investments for a VERY long time, dumped half his Apple stock and is 50% cash and bonds as of his latest quarterly report.

47

isn’t the underlying problem not that prices are rising, but the value of the currency in which the items are purchased is falling?

48

the dollar is low right now. here an article that might help.

bonds think there is a problem, while stocks are flying high

https://www.marketwatch.com/story/stocks-and-bonds-are-sending-conflicting-messages-about-where-economy-is-heading-next-d6bbd199?mod=mw_quote_news

Allan

49

That is a related problem, but not the cause (nor a fuller way of explaining it)

What really is happening is:
Borrowing money costs over 5.09%.
Businesses are making just 4.66%.

Wanna open a pizza shop (or start a pod cast, or a bitcoin miner or an AI company?)
For every $100k you sink into the business you will make $4,660 but you have to pay $5,090.

It’s part of why Powell is under pressure to lower rates.
.
.
.
Some businesses are just weeds. They should have never been opened. The only way they can survive is if Powell feeds them and waters them via lower rates.

Free market says: “They are weeds and they should be allowed to die. Heck that will even help the legit businesses.”

Keynesians say: “We must preserve the crap. In fact we want more crap. We must lower rates to subsidize and sustain every idiotic business decision ever made because, on paper that’s what makes it look like the economy is growing.”

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50

Keynesian crap… when several crap companies close - does that cause a shock to the system or just to those crap companies… and if enough crap companies close, wouldn’t that be a good thing? and who lets the crap companies start in the first place? growing piles of crap masquerading as legitimate business would make the market stink… I don’t know…

51

When money was free,
everyone and their brother opened a business,
and legitimate businesses expanded far beyond the sustainable rate.

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A lot of weeds were created.
It should not be US policy to feed and water the weeds.

52

expanding until unsustainability…

balloons should never wish for over inflation…

a fool and his money…

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53

Gold and the S&P have been moving in tandem since (roughly) January.

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When the stock market and the anti-stock market move in tandem well, it obviously does not mean the underlying producer/employers are doing well.

It means people are moving that big pile of cash off the sidelines and betting for and against the market in roughly equivalent ways.

54

No, not a nice return, an okay return. My portfolio was yielding 8-10% while Trump was in office until COVID blew the doors off. And inflation averaged about 1.5% over the same period. That was a nice return.

55

Oh btw, Buffet just sold off another billion worth of Bank of America stock.
That’s only 3% of his $BAC so it’s not a major alarm, just an interesting part of a very unusual pattern.