Bonds!

[rogermunibond]

Tax Foundation provides a pretty good primer on what the tariffs are and their effects.

 

Largest tax increase since 1993.

 

https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

[Gregmal]

27 minutes ago, thepupil said:

 

the 30 year averaged 4.77%  yield in 1H2025, it's slightly higher today

the 10 year averaged 4.40% in 1H2025, it's slightly bps lower today 

 

One doesn't need to be selective. 

 

From April 1st to present, TLT has underperformed. Pick a date in 2025, happy to run it.

 

SPY by 25%

ACWI by 28%

GLD by 61% 

t-bills by 3%

VXUS by 35%

 

pick whatever benchmark you want. USD fixed income is all but guaranteed to have been of the worst asset classes to have bought in 2025. I say this as someone who was buying it. it is very difficult to find a day in 2025 in which buying duration was the right call. these are not cherry picked benchmarks. they are

 

US Stocks

All stock in world

Gold

t-bills

Ex US stocks

 

the victory lap on duration is bewildering. 

 

said differently, if one did take the other side and "would not touch duration witha  ten foot pole" and was in fact shorting duration. That short has been virtually costless. the proceeds invested in virtually any other asset would've beat the snot out of the costs of the short. one notable exception is bitcoin, but that moves and groove to a greater degree than more established asset classes. 

 

I was doing the same thing as you (to a degree) buying LT bonds ( I was actually selling my bonds in my 401k to buy ex US stocks and then buying fewer but more punchy LT bonds / zero's / high duration stuff in my taxable account to stay long of duration.

 

i more or less had the same view as you (and honestly think that 30y at close to a 5 handle is pretty enticing (or maybe even som sterling GOOG 2126 bonds @ 6%!)...but on the time horizon we're talking, that view was incorrect. buyers of LT bonds have lost purchasing power relative to almost any asset over this time frame...basically in line w/ USD cash. 

 

i am honestly envious of the ability to reinforce one's ego and confidence regardless of data to the contrary. genuinely, I think that kind of bravado makes one a better long term investor (to a point)

 

 

 

 

 

Lmfao my god I swear sometimes you’re just a troll. No one made that argument. It’s further odd because you were part of the discussions between @gfp, myself and some others the they occurred. 
 

But you tend to do this from time to time. Howard Hughes capital allocation isn’t horrible, it’s actually good. Joes performance issue has nothing to do with Bruce. FRPH management is doing a great job doing exactly what they’ve been doing. 
 

Ugh….like seriously…unless @gfpmade some statements I’m unaware of that you’re attributing to me mistakenly, I don’t think anyone ever said duration would outperform the index lol. That’s like the stupidest thing I’ve ever heard. But nevertheless here we are. From “you’re going to get wiped out being long bonds”(which iirc you were basically on the same page as us “no we won’t” guys) to now….its underperformed the index….

 

As I stated then, my purpose for even owning anything was because I’d rather express a semi bearish hedge position via owning big chunks of duration than taking the “cash/short the market” view others were broadcasting. 
 

This is a bit head scratching. 

[rogermunibond]

@gfp @Spooky

 

50 bps move in the 10Y

 

with 2.5% CPI and 2-2.25% real growth, you have to see 10Ys higher.

Edited February 11 by rogermunibond

[thepupil]

okay.....I am genuinely not trolling...to me it seemed like you said tariffs did not cause inflation which i interpreted to mean the price of goods going up (all data i see is that the price of tariffed goods did go up). we appear to have been talking past one another as i am using a less rigorous definition of inflation than you...whether or not academically a tax is inflation...isn't as relevant to me as whether or not people are paying more for something than they otherwise would...if you put a stamp duty on nanny's compensation...i don't know if that is inflation as @gfp would define it, but it would certainly be inflation for me as my largest expense would cost more for the same thing. 

 

then it seemed like you were saying duration/USD bears were wrong...to me they've been correct, albeit in small magnitude. i've provided the data which backs that view. obviously the same data does not show duration "getting wiped". someone who was certain that duration and USD would get "wiped out" over the next 12 months was incorrect. we can agree on that...

 

the continued ad hominem attacks regarding my intelligence are just unnecessary and detract from the discussion. 

 

 

Edited February 11 by thepupil

[Gregmal]

The conversations were all here and repetitious and you were involved in them when they occurred which is why the rearrangement of the argument was puzzling to me. 
 

They were;

 

-tariffs were going to be massively inflationary

-this would force the Fed to hike

-This tips us into a deep recession or even depression

-Stagflation….duration gets smoked and the market does horrible

 

 

Some of us said none of these things are going to happen and “this is what I’m doing”. Being long some duration(on margin) was one of those positions for me as market insurance. When you look at those arguments, absolutely none of those things occurred, which is evidenced by some of the numbers you’ve posted.
 

And in no way, shape or form would I ever make such a crazy claim as bonds or cash would outperform the market. If you want to underperform, it’s virtually guaranteed that owning those types of things will lead to just that. 
 

 

 

Edited February 11 by Gregmal

[gfp]

I think we can all agree that there are more lucrative places to focus our investment minds than government interest rates at the moment.  There is no trend.  There is a lot of time wasting.

 

I don't think we see a 5-handle on TNX again this year.  Not sure we see a 3 either, but if I had to bet one way or another I would bet we see a "3" in front before we see a "5"

 

The employment situation is about to go through a multi-year, brutal disruption.  At the same time inflation comes in "below Fed target."

 

A blip in Oil prices from a possible Iran strike, however likely, is not going to change that.

[dealraker]

8 minutes ago, Gregmal said:

The conversations were all here and repetitious and you were involved in them when they occurred which is why the rearrangement of the argument was puzzling to me. 
 

They were;

 

-tariffs were going to be massively inflationary

-this would force the Fed to hike

-This tips us into a deep recession or even depression

-Stagflation….duration gets smoked and the market does horrible

 

 

Some of us said none of these things are going to happen and “this is what I’m doing”. Being long some duration(on margin) was one of those positions for me as market insurance. When you look at those arguments, absolutely none of those things occurred, which is evidenced by some of the numbers you’ve posted.
 

And in no way, shape or form would I ever make such a crazy claim as bonds or cash would outperform the market. If you want to underperform, it’s virtually guaranteed that owning those types of things will lead to just that. 
 

 

 

Greg don't forget that you and ole dealraker made a big stand on big tech valuations just a few years ago.

 

Parsad quickly doubled his net worth and then some.  I think both of us held some tech so we weren't left out.  But we were probably as wrong as wrong could possibly be, maybe setting an all time record for how wrong a human could be.

 

While dogma rules, the world is a very difficult place to continually be correct with bold predictions.  pupil is a poster who I have let lead me in to two investments, both so successful I'd flatter him into oblivion if I posted the results.  

 

Lots to learn from all people here.  

Edited February 11 by dealraker

[Spooky]

Some big downwards revisions in job numbers from 2024 and 2025. January headline numbers also seem a little funky to me...

Edited February 11 by Spooky

[Gregmal]

2 minutes ago, dealraker said:

Greg don't forget that you and ole dealraker made a big stand on big tech valuations just a few years ago.

 

Parsad quickly doubled his net worth and then some.  I think both of us held some tech so we weren't left out.  But we were probably as wrong as wrong could possibly be, maybe setting an all time record for how wrong a human could be.

 

While dogma rules, the world is a very difficult place to continually be correct with bold predictions.  pupil is a poster who I have let lead me in to two investments, both so successful I'd flatter him into oblivion if I posted the results.  

 

Lots to learn from all people here.  

Totally. I also shit all over Apple as a one trick pony at 15x in like 2017 or whenever everyone was backing up the truck. I learn tremendously from being wrong. It’s certainly better than being right by accident which of course happens sometimes too. Always refining the process is crucial. 
 

It’s just that being intellectually honest when engaging in these sort of things is pretty crucial too. Especially when you consider some stuff, more evident in some individual stock threads, where there’s collective group work going on, that everyone can benefit from the evolution of the collective group work snowball if it evolves the right way. 
 

I’m basically willingly to engage pretty much anyone with a quarter of a brain or more, provided your entire purpose here isn’t to have 100% of your posts be rambling about some old dude you don’t like or whatever. As such, sometimes I get myself in silly circular, redundant, and repetitive arguments that are a waste of time. Buying back stock at $100 to shrink the business and close the NAV gap, then pivoting to making a massive debt funded acquisition, then issuing stock at $55, and then repurchasing stock again at $100 is downright stupid and I don’t need to spend oodles of my time debating the circumstances and reasons why it’s not; it’s self evident and warrants no further discussion. So yea, sometimes I’d be better off just disengaging!

[UK]

18 minutes ago, gfp said:

I think we can all agree that there are more lucrative places to focus our investment minds than government interest rates at the moment.  There is no trend.  There is a lot of time wasting.

 

I don't think we see a 5-handle on TNX again this year.  Not sure we see a 3 either, but if I had to bet one way or another I would bet we see a "3" in front before we see a "5"

 

The employment situation is about to go through a multi-year, brutal disruption.  At the same time inflation comes in "below Fed target."

 

A blip in Oil prices from a possible Iran strike, however likely, is not going to change that.

But what if economy accelerates into this 5+ growth everyone seems to begin talking about? 

[Spooky]

Are we starting to see strong GDP growth without corresponding job growth?

[73 Reds]

3 minutes ago, Spooky said:

Are we starting to see strong GDP growth without corresponding job growth?

Better question:  Isn't that the goal all along?

[Spooky]

Just now, 73 Reds said:

Better question:  Isn't that the goal all along?

 

It definitely is for companies like Amazon. The implications for society will be huge.

[thepupil]

1 hour ago, Gregmal said:

Buying back stock at $100 to shrink the business and close the NAV gap, then pivoting to making a massive debt funded acquisition, then issuing stock at $55, and then repurchasing stock again at $100 is downright stupid and I don’t need to spend oodles of my time debating the circumstances and reasons why it’s not; it’s self evident and warrants no further discussion. So yea, sometimes I’d be better off just disengaging!

 

haha, the funny part is, with 6 years of hindsight the HHH's 2019 office deal looks fine / in line w/ how they underwrote it. covid definitely delayed / worsened execution and i haven't like built out some crazy model or anything, but both towers are 100% occupied, they've hit their NOI targets, they've done some decent financings. 

 

we could have these debates endlesslly apparently because i look at the data on that one...differently (surprise!!). 

 

 

[changegonnacome]

23 hours ago, Gregmal said:

I’ve spent more than enough time over the years on this along with others like @changegonnacome detailing this so it’s out there.

 

Yep interesting period to look back on....lot I got right (higher for longer, inflation persistence beyond just transitory), lot I got wrong (need for recession to really get inflation more under control).

 

A couple of thoughts from that period.

 

I think the US got acceptable inflation moderation not because the Fed's interest hiking worked** but rather because of two core thing.......... now sure supply chains got re-configured post-COVID and things straightened out there but the underlying kind of monetary inflation, the largese around stimulus created by insane Governemnt handouts got crushed by two things one home, one abroad......at home Biden/Harris by ineptitude or via supply side economic genius insights let in millions upon millions of working age illegal migrants which helped moderate services inflation (while levitating OER in urban centers) overall it was likely a good trade to get inflation to moderate.....abroad China post-COVID, post real estate bust in response to their own economic weakness sent a deflationary wave of goods towards the US.....combined these two things was enough to get inflation back into the high 2's without the recessions seen in the past.

 

** the reality is the US economy has become LESS interest rate sensitive since the GFC as the US Gov has ran increasing fiscal deficits and so by extension through private sector surpluses has defacto de-levered the private sector reducing its leverage and therefore its interest rate sensitivity.......something I think @wabuffo has spoken about.....indeed it can be argued based on the composition of private sector balance sheets/demographics that higher rates might actually be mildly stimulative. I've read a few things Kevin Warsh has written in the past and he seems to subscribe to this view.....his plan if he wasnt a member of a committee would be to re-lever the private sector by shrinking the Fed's balance sheet, not being so accommodating to the Treasury such that fiscal deficits shrank.....his solution to not crashing the economy in this maneuver would be to give the banks capital relief such the 'equity' withdrawn by the Fed/Fiscal would be replaced by debt coming from the private sector (banks etc.). Which is all consistent with shrinking the footprint of the Government/Fed in the private sector.

 

Edited February 11 by changegonnacome

[rogermunibond]

3 hours ago, Spooky said:

 

It definitely is for companies like Amazon. The implications for society will be huge.

 

It hasn't happened before in the last 20-30 years, and probably going back farther than that.

 

Usually when the economy expands and GDP increases, employment also increases.  This is even when GDP growth gets a boost from productivity improvements.

 

Real growth coming entirely from productivity gains and no new jobs would be weird.

[rogermunibond]

Okay I think the market is setting up for a macro environment with low inflation, 4 cuts in the back half of 2026 bringing rates to 2.75%, weak labor market with maybe zero growth, first signs of AI job cuts, and 2-3% GDP.  Kind of a jobless recovery situation not unlike 1991-93.

 

The huge jump in oil majors (XOM, CVX, COP), consumer staples seem very defensive.

[Kupotea]

My strong suspicion is we’re set up to overheat by the second half of the year. Maybe sooner. Fiscal impulse is absurd and FED will continue cutting when the economic data shows no need for it. People keep crying recession and AI job losses are coming but it’s all narrative to date there’s no substance. Yields up will spook the market badly at some point and FED will step in to massage the long end lower. I’m mostly in cash and waiting for the right set of opportunities. Had my best year ever last year with a heavy gold miner concentration and I’m in no rush to give back those gains.

[frommi]

When you look at the economic cycle we are late stage, similar to the end of 2007. Yields go down, recession comes, bonds rallye hard and at the same time everything goes down the drain. Pretty sure 2026 is a year with huge drawdowns in the stock market. Can imagine we see some more weeks and months of defensive stocks/REIT's rallying before everything goes down together.

[gfp]

On 2/11/2026 at 9:15 AM, gfp said:

I think we can all agree that there are more lucrative places to focus our investment minds than government interest rates at the moment.  There is no trend.  There is a lot of time wasting.

 

I don't think we see a 5-handle on TNX again this year.  Not sure we see a 3 either, but if I had to bet one way or another I would bet we see a "3" in front before we see a "5"

 

The employment situation is about to go through a multi-year, brutal disruption.  At the same time inflation comes in "below Fed target."

 

A blip in Oil prices from a possible Iran strike, however likely, is not going to change that.

 

[Spooky]

Nice call gfp. Where do things go from here? There is so much noise out there these days.

[dealraker]

My view is a slew of short term Treasury bills will be quite the treasure at some point not too far off.

 

In the meantime Mr. Market is likely to panic higher - it is in an animals blood to chase what is running!

[Blake Hampton]

26 minutes ago, dealraker said:

My view is a slew of short term Treasury bills will be quite the treasure at some point not too far off.

 

In the meantime Mr. Market is likely to panic higher - it is in an animals blood to chase what is running!

I agree. I also think 'panic higher' is pretty definitive.

[gfp]

dealraker approved

 

[Blake Hampton]

3 minutes ago, gfp said:

dealraker approved

 

 

But how big relative to total assets, if you don't mind me asking?