Monday, November 24, 2008

4 Reasons Treasuries May Not Fall...Yet

Tom Dyson, who also believes in the short case for long-dated US treasuries, writes in today's DailyWealth that it may be some time before treasuries actually start to fall.

But he closes the article by mentioning that the danger is much greater on the long side of this trade - and mentions a great recent quote on the topic by legendary investor Rick Rule:

"Money will be attracted to the liquidity and transparency of the U.S. long Treasury market. I think this will be the final bubble of my generation. Crowding into a 20-year bond in a depreciating currency when inflation sets in, and long rates inevitably rise, will be a religious experience for the victims, in my opinion."


kahunabear said...

This is an unbelievable bubble. That said, bubble tops are certainly hard to time. I have found it is not waiting that makes them hard to pick, but the fact that they get so wildy volatile near the top. The recent oil top is a perfect example. I timed it within weeks, but exited way too soon due to the wild volatility. Sigh, if I had stuck with it, it could have been a monster. Yep, the ideas is 1%, the execution is 99%. I am long TBT. Hopefully I will do better this time around.

Brett Owens said...

Well said, bubble tops are very tough to time. The market can stay irrational longer than we can stay solvent, after all, right?

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