Down goes the Dow

Agreed, and had I taken my time I would have mentioned that in my earlier post. I tend to favour long term (10 to 30 year) bonds over shorter terms, all else being equal, because I like the certainty of decent (around 5%, a bit more if possible) distributions “guaranteed” (subject to the risks discussed earlier) for at least as long as my cognitive capacity remains adequate to properly enjoy our money. 😀

red tape is a thicket, yes. But there is movement among Democrats to get out the scissors. The Dems run the crowded parts of the country where the housing crisis is most acute so they are starting to lead.

several places are changing rules, esp around requiring parking to be provided as part of a permit.

For decades, San Francisco’s reputation has been that it’s too difficult to build new homes — despite a dearth of housing that’s contributed to a growing homelessness crisis.
But that’s expected to change soon under an expanded state law that promises to cut red tape and speed construction.
Officials estimate the law, Senate Bill 423, will cut approval time for projects in San Francisco from two years to six months, streamlining that housing advocates consider a much-needed course correction in a city where construction is beset by delays and high costs.

I am very much of the same mind, but I thought you were big into intermediates...

Since this thread popped up to the first page, I'll take the opportunity to look at YTD for the Dow and for me.

Dow YTD: UP 13.89%

Flagpole YTD: UP 16.19% (down a tad from the last time I did this)

Exactly this.

Sold a big lot of PM yesterday at close, it popped over 10% for a roughly 35% gain. Kept none, but I would re-buy if the price is right.

Looking at some of those USD-denominated Mexican bonds, I find it interesting that they carry a higher S&P rating (but almost the same) than do some other sovereign EM bonds of the same term, from jurisdictions with stable governments and currencies like Hungary, yet also have a higher yield.

(please excuse the sentence structure)

I have found the same phenomenon when comparing bonds from other EM's. Is now the time to talk about the rating agencies? lol please, no.

These things really scream for doing your own DD. Argentine bonds, anyone??

Anyone bargain hunting? YTD:

BA -39%

LULU -43%

NIKE -26%

DG -41%

DLTR -53%

ULTA -26%

EL -40%

CVS -28%

MRNA -47%

DXCM -42%

HUM -43%

WBD -35%

INTC -56%

This list includes some pretty significant players in their fields. Each has its reason for being down. Insider selling a clue? At first glance I don't find anything immediately appealing...

Or Apple:

The weighted average time to maturity of bonds in our portfolio is currently 7.2 years, made up of ~ 2/3 under 5 years and ~ 1/3 mainly longer than 10 years. That makeup is a function on what looked good at the time cash was available to buy bonds over the last year. At this moment, I am only looking at 20 years and longer. This time next year, I couldn't say what we will be buying, that will depend on prevailing market conditions.

Hussman Strategic YTD - DOWN 8%

AAPL YTD - UP 23%

AAPL 2000 TO 2024 - UP 30,000%

I will stick with AAPL

betting on 20+ year bonds seems questionable to me

it seems that governments will keep increasing deficits and debt to the moon...betting that this won't spark inflation or at least a debt crisis over the next 20 years is something I'm not very interested in.

I have mostly short term bonds but I do have some in long term bonds in case of a recession. LT bonds should hedge out some of my stock risk in that situation.

That is the prevailing view. Personally, I will go the other way. :-)

Care to elaborate? What is the primary risk that concerns you with 20+ year (blue chip corporate, low end of investment grade for me) bonds? Can you walk me through the scenario that's troubling you?

I'm not saying you're wrong, I just don't know what you see that I'm not seeing, keen to get your actual expert thoughts.

When were you ever bullish on Tech companies?

that as governments keep racking up debt with no serious talk of reining it in, investors will demand higher and higher interest rates, or investors won't buy the bonds.
So rates go ever higher, driving down the price of bonds purchased today.

Buyers of today's bonds will be stuck with 4% coupons while everyone else gets 6,7 or 8%, and those 4% coupon bonds will lose a lot of value in the decades before maturity.

Fair statement.

Technology to excess, is like alcohol. It really doesn’t add much to your life.

Over hyped, to be cool.

OK, I guess I see where you’re coming from, but I’m not sure you’ve thought this through fully, and please correct me if I’m wrong. Price fluctuations along the way are irrelevant at maturity, when the bonds cash out at face value. I suppose your reasoning holds some validity for a bond trader, but not so much for somebody buying the bonds for a long term income stream. Like me, for example. 😀

sure, if you hold to maturity (20+ years!) then you get your money back

but all those years you may be missing out on higher interest rates (if they happen) and if you need to sell the bond for spending money you'd be forced to sell at a big loss.

but also inflation...if you buy a bond for $25,000 and cash it in 20 years from now you'll get your $25,000....but its buying power will of course be far less because of inflation. And inflation comes along with debt crises and currency crises such as we may get from this debt spiral that seems to be starting.

Question is: are you being compensated for the additional risk you are taking over someone who buys a 2 year bond. That's the hard question.

Short term bond holders have less inflation risk, but they have 'reinvestment risk' in which their bond matures in 2 years and if rates are far lower then, they will wish they had locked in a longer rate, as you did.

I think we will just have to agree to disagree. You’ve made valid points, all of which apply to most any kind of investment.