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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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  • Turning Neutral From Bullish On Bonds 1 comment
    May 29, 2014 9:28 PM

    In March, I wrote a Seeking Alpha article titled Turning Bullish on Bonds. We now have yet another gap down in bond prices on the futures, at a level on the 10-year note that has been troublesome for bonds for months:

    (click to enlarge)

    From FINVIZ.

    Given the lack of real fundamental support for bonds here, I wouldn't hold more bonds than needed for income. Stocks are high, but governments around the world can't stop the easy money habit, and the strong PMIs in the U.S. and strong data week after week from the trucking and railroad organizations (ATA and AAR) make me think there's more life in the "right" stocks yet. So I exit the theoretical trade made somewhere between the March 17 date of the above-linked article and one from December that called, more or less, the top in rates. I'm now neutral on bonds.

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  • Jonny Tellyarn
    , contributor
    Comments (89) | Send Message
    If yields on the 10 year start to rise, it will be most interesting to see what explanation we hear attached to it. I'll bet the story we hear will be that the bond market is anticipating more growth and inflation. And I bet that will be wrong.
    31 May 2014, 02:58 PM Reply Like
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