Bonds Continue To Rally

[tombgrt]

Remarkable that the 10y still yields under 2% after the run-up un the stock market.

I just watched this interview from Wealthtrack with Robert Kessler (extreme bull on treasuries):

http://wealthtrack.com/previous_12-30-2011.php

Kessler is aiming for 1% on the 10 year treasuries because of deleveraging and coming deflation.  Helps to understand Prem's thesis better, also considering he has the insurance business to think of. Doubt he'll sell any soon!

[ERICOPOLY]

He mentions Warren Buffett not caring if he buys IBM at the highest price possible because he's got $10b in his back pocket. 

[JEast]

It would appear after the FED's recent announcement to keep a zero percent environment a year longer than expected, 1% on the 10 year treasuries is more likely than 3% anytime soon.  Irrespective, I still would like HW to sell some of their/our long-term bonds.  Another 70bp would be a nice addition to BV, but assuming FFH is still roughly 90%, or more, hedged, buying some businesses or equities would appear to be more beneficial to long-term shareholders.  My 2 or 3 cents.


Cheers
JEast

[JEast]

Just bumping this up to say thanks to the HW team for being more transparent on the bond holdings at both the annual meeting and on the recent conference call.  I emphasis 'team' as most of recognize the strength of the team.

It would appear that the cash is surely building (long-term bonds nearly liquidated) with the somewhat recent rally and return back to safety in the bond market.  If a real scare comes, surely bonds will rally even more, but the rally should be captured, in part, with the CPI swaps and the cash now on hand can be spent aggressively in the equity markets.

Cheers
JEast