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DoctoRx
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Over 30 years of investing in individual stocks. Extensive business experience with small to mid-size companies, including as CEO. Many hundreds of blog posts on financial and economic matters since 2008. Focus on value with catalysts for upside price action. Background as a physician and... More
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  • Short Term Bottom In Long Bond Interest Rates? 0 comments
    Mar 24, 2014 4:15 PM

    BBG reported that the interest rate spread between short- and long-term bonds has hit the narrowest level since H2 2009. I have been taking (modest) profits on the Vanguard zero coupon long bond ETF with the symbol EDV today and Friday on the strength in the 30 year T-bond. This has far outperformed the 10 year bond, so it's a divergence I'm not comfortable with. It would appear that momo players are piling into the 30 year, LOL, while dumping the biotech and DDD-type stuff. I'm happiest right now with insurance stocks that are reasonably valued by P:B and P:E and that have "normal" bullish/consolidating charts. Other rebounding co's with good valuation and earnings momentum stories will be discussed in future articles, either Premium or InstaBlog.

    With cash still trash, rushing out of stocks doesn't appeal to me, and while I look for lower long bond yields, the trader in me wants to own them cheaper.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: Not investment advice. I am not an investment adviser.

    Themes: Bonds, stocks
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