Seeking Alpha
  • wanderingmonk
    A question for you experts out there. Is there a theoretical price ceiling for TLT ? After all, treasury yield cannot go below 0%, right?
    8/10/12
    Reply (9)
    • Hillbilly Stock Star: Gary Shilling? 1% yield on 20yr, no real idea, they are playing "prision rules".
      8/10/12
    • Hillbilly Stock Star: I am heavy short-term bonds SHM, VCSH, lightweight VCLT etc.
      8/10/12
    • Hillbilly Stock Star: DBL.......If Uncle Benny buys mortgages? No idea, lightly long.
      8/10/12
    • Hillbilly Stock Star: PCEF......for income too, Long.
      8/10/12
    • whidbey: Yield can go below 0, and as for highs, none in theory, but when the yield is 0 it becomes and insurance policy on return of capital.
      8/10/12
    • wanderingmonk: How can the ;yield go below 0? At 0, people can just hold physical money, no? If 30 yr treasury yield went to 0, what would TLT be at?
      8/10/12
    • wanderingmonk: Hey Hillbilly.. man, your responses are jibberish. Try speaking English next time.
      8/10/12
    • RADO: Yields can go below 0, because it might be safer to own negative yield treasuries than keep money in a bank (banks can go bankrupt).
      8/16/12
    • RADO: If yield is 0, max bond price is sum of remaining coupon payments and payment at maturity. For example, $4.5 coupon x 30 years + $100 = $235
      8/16/12