Author Topic: 1999 again?  (Read 25810 times)

RuleNumberOne

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Re: 1999 again?
« Reply #160 on: August 08, 2019, 09:56:27 AM »
Bloomberg is doing great journalism, unlike the FT that has become the mouthpiece of Eurocrats.

The bubble in the bond market is much bigger than 1999 because the sums involved are far bigger, by orders of magnitude.


This Might Be the Bond Market’s Dot-Com Moment
https://www.bloomberg.com/opinion/articles/2019-08-08/this-might-be-the-bond-market-s-dot-com-moment?srnd=premium

In today’s bond market, it seems as if no price is too high.
https://www.bloomberg.com/news/articles/2019-08-07/the-furious-global-bond-market-rally-shows-few-signs-of-abating

The ECB Is Dragging Us Deeper Into Madness
https://www.bloomberg.com/opinion/articles/2019-08-08/ecb-is-dragging-the-bond-market-deeper-into-yield-curve-madness?srnd=premium

« Last Edit: August 08, 2019, 09:59:56 AM by RuleNumberOne »


gokou3

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Re: 1999 again?
« Reply #161 on: August 08, 2019, 12:23:39 PM »
Quote
Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.

In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.

What would be a good instrument for placing such a bet as a retail investor?  I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.

Castanza

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Re: 1999 again?
« Reply #162 on: August 08, 2019, 12:55:06 PM »
Quote
Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.

In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.

What would be a good instrument for placing such a bet as a retail investor?  I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.

Maybe not a perfect answer to your question but Eurodollar futures could be a decent play with the current ECB climate.

SHDL

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Re: 1999 again?
« Reply #163 on: August 08, 2019, 09:30:19 PM »
Quote
Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.

In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.

What would be a good instrument for placing such a bet as a retail investor?  I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.

TIPS are probably the most obvious candidate. I would focus on individual bonds that mature within a year or two.  If you have the inclination you can probably even isolate the inflation protection component by simultaneously shorting a (non-inflation protected) Treasury note that matures on the same day.

CorpRaider

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Re: 1999 again?
« Reply #164 on: August 09, 2019, 12:13:37 PM »
What would be a good instrument for placing such a bet as a retail investor?  I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.

U said retail so:  Series I Treasury bonds have a .50% real return through November (I think).  You can buy $10K per annum ($10K per soc # for a married couple).  Get the real return rate + a floating inflation indexed rate.  Usually better tax treatment (and some other advantages) than TIPS, but obviously limited by size. 
« Last Edit: August 09, 2019, 05:52:29 PM by CorpRaider »

gokou3

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Re: 1999 again?
« Reply #165 on: August 09, 2019, 12:26:08 PM »
Quote
Another catalyst later in the year might yet involve Trump, just as in 2016. If China and the U.S. can fashion a trade peace, and convince the markets that they mean it, a lot of people will find themselves on the wrong side of the trade.

In such an environment, it would obviously be a very bad idea to hold bonds. Stocks might benefit at least initially from the sentiment that a total slowdown could be averted. But if there is something to buy for now, to protect against these eventualities, maybe it might be a bet on faster inflation through the bond market. It can, after all, be done very cheaply. And if this does indeed prove to have been the moment of revulsion, it would pay off.

What would be a good instrument for placing such a bet as a retail investor?  I remember around 2010 Soros or his proteges made a similar bet on interest rate increases using some derivative instruments, but I forgot what it was and I wouldn't be able to access such instruments anyways.

Maybe not a perfect answer to your question but Eurodollar futures could be a decent play with the current ECB climate.

Thanks, this seems to be a good instrument for a highly-leveraged bet... and with options, the downside is limited.

https://www.cmegroup.com/trading/interest-rates/stir/eurodollar_quotes_globex.html?optionProductId=4&optionExpiration=4-Q9




Spekulatius

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Re: 1999 again?
« Reply #166 on: August 09, 2019, 04:12:59 PM »
Just present facts without any judgment. You researched this individual online and found out these violations. I wouldn’t even call him a swindler (which is a judgement) and you don’t know the terms of the annuity , so I wouldn’t even comment on that. Then if the customer is interested, offer further help to investigate or look at the annuity contract. It‘s then up to the customer to take action and work with you or somebody else.

That’s what I would do, but then again, I am not an investment advisor.
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Cigarbutt

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Re: 1999 again?
« Reply #167 on: August 25, 2019, 06:16:36 AM »
I just finished an 'old' book (published in 2003) this AM and this post is a link from WeWork's upcoming IPO to the general sentiment that existed in 1999.
https://stratechery.com/2019/the-wework-ipo/
The IPO documentation is interesting (I can't definitely figure out if it's a long or a short) from the general sentiment point of view and the way Stratechery frames the story makes it an interesting thought exercise.

https://www.researchaffiliates.com/en_us/publications/articles/715-bubble-bubble-toil-and-trouble.html
This post is not really about "we're in a bubble all over again", it's about the difficulty in discounting future developments in the technology world. In the article, there is a table listing the top ten tech market caps in 2000 and the subsequent market returns. Fascinating.

I just finished Stealing Time and IMO the author does a job chronological job.
https://www.amazon.com/Stealing-Time-Steve-Collapse-Warner/dp/0743247868/ref=sr_1_2?keywords=stealing+time&qid=1566737103&s=gateway&sr=8-2
Another fascinating aspect is how insiders of the company and investors at large pushed the AOL company to such heights and how very bright and savvy people made "the biggest mistake in corporate history" when the convergence merger was completed. It appears that, in 1999, not many people saw the potential loss of market share related to the eventual growth of high speed broadband providers. Who talks about AOL now? Do you remember those promotional CDs?

In 1999, I was slowly getting serious about investing and did not get caught up by the internet frenzy. It would be nice to say it was because of unusual knowledge and insights but it's only because a defining feature of the investing style is to invest in businesses that can be reasonably understood and where one can form a reasonable opinion about long-term prospects of the relevant industry and specific embedded moat.

Conclusion at a humble level: Mr. Benjamin Graham belongs in the 'fallen' category in the present era but I decided to add a new quote on my wall, an Horace quote that Mr. Graham often referred to:
“Many shall be restored that now are fallen and many shall fall that now are in honor.”

Liberty

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Re: 1999 again?
« Reply #168 on: September 30, 2019, 08:57:49 AM »
New post by the always thoughtful Brooklyn Investor:

http://brooklyninvestor.blogspot.com/2019/09/bubble-yet.html
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RuleNumberOne

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Re: 1999 again?
« Reply #169 on: September 30, 2019, 09:15:36 AM »
When I started this topic on June 20, the BVP "Emerging Cloud" Index was at 1254, today it is at 1102. The upward momentum has been lost. Not sure whether that is permanent or temporary. WeWork went bust in record time!

If Evasive Elizabeth becomes the nominee, there would be a big crash. IMO Brooklyn Investor's article looks weakest when it addresses what happens if Lying Liz keeps advancing.

Leon Cooperman is right, the market circuit breakers will be triggered if Warren wins.

https://www.independent.co.uk/news/world/americas/us-election/warren-biden-trump-impeachment-latest-2020-race-quinnipiac-polls-frontrunner-a9124731.html

"Four polls used by the Democratic National Committee (DNC) to determine which candidates qualify for its debates this week gave Ms Warren a lead over Mr Biden in Iowa, the first state to hold a primary or caucus, and in New Hampshire, which is the second."

New post by the always thoughtful Brooklyn Investor:

http://brooklyninvestor.blogspot.com/2019/09/bubble-yet.html
« Last Edit: September 30, 2019, 09:17:24 AM by RuleNumberOne »