Alex Filonov's  Instablog

Alex Filonov
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I was born in 1956 in USSR. After graduation from college in 1979 I worked full-time as an IT specialist. Until 1990 I worked for different companies in the Soviet military industrial complex. I created a small software business in 1991, which failed in 1993. I worked for Oracle Corp in 1995 in... More
My blog:
Muddling Investor
  • Bonds Off The Cliff (It's Embarrassing) 1 comment
    Mar 16, 2012 1:47 PM | about stocks: BTA, NMO, TLT

    Yes, it is embarassing. I wrote in my "Accual Portfolio Review", that I'm planning to reduce fixed income part and increase stocks. Well, I increased stocks positions, but failed to reduce bonds. More to the point, I added to BlackRock Long-Term Municipal Advantage Trust (NYSE:BTA) position. The idea was to move money from Nuveen Municipal Market Opportuninty Fund (NYSE:NMO) to BTA, taking advantage of higher yield and better fund management.
    Well, I was wrong. Very wrong. The idea in portfolio review was right, I just failed to implement it. Besides, I missed the fact that muni CEFs had parabolic charts lately. All of them. You don't buy parabolic chart, you sell it.
    It looks like all bonds (starting with Treasuries) are down because of increased inflation expectations. I still don't see where inflation might come from (China?). And I think 10 year Treasuries will be back to 2% this year. I don't want to sell any muni CEFs now, price is too low and yield is good.
    The lesson: I need to act on my plan, and act fast. Markets are faster nowadays, and if you are too late to act, you missed opportunity, or even worse, you lost money.

    Disclosure: I am long BTA, CEV, MZF, NMO.

    Additional disclosure: Positions can change any time.

    Stocks: BTA, NMO, TLT
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  • igggy
    , contributor
    Comments (509) | Send Message
    Obviously, the stock rally was fueled by money that came out of bonds (and gold). Since Bernanke didn't mention QE3 that was the obvious outcome. Might be a good time to buy TLT and GLD.
    17 Mar 2012, 01:05 AM Reply Like
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