Bonds!

[Gregmal]

I really think the answer is for Sanjeev to create a FacePalm Hall of Fame for posts that we can aggregate to highlight epic wrong calls over the years. I still think my all time favorite was in late April 2020, something to the tune of “Everyone’s been warned and has had their bounce. Whoever is stupid enough not to have sold this suckers rally will get what they deserve”….but there’s definitely plenty of others we ve accumulated over the years. Maybe we can call it Hampton Hall.

[thepupil]

12 minutes ago, Gregmal said:

I really think the answer is for Sanjeev to create a FacePalm Hall of Fame for posts that we can aggregate to highlight epic wrong calls over the years. I still think my all time favorite was in late April 2020, something to the tune of “Everyone’s been warned and has had their bounce. Whoever is stupid enough not to have sold this suckers rally will get what they deserve”….but there’s definitely plenty of others we ve accumulated over the years. Maybe we can call it Hampton Hall.

 

you have this way of taking one person's view or even a few people's musings while they think through something and turning it into this immutable extreme of a consensus with which you omnisciently and presciently disagreed. 

 

 

Idk, for the most part, I imagine the bulk of the board stayed invested in their companies throughout 2020 and 2025 and continued to compound their wealth.

 

maybe some raised some cash (unnecessarily  w/ hindsight), maybe some blew a few hundred bps on hedges (I did!), maybe some sold some businesses at local lows to buy things w/ less perceived risk and that was wrong.

 

for the most part, I don't think there was this kind of negative extreme strawman in either instance. i don't have visibility into others' portfolios of course, but have read articilaes on how even retail investors over time have gotten better and just bought through thick and thin.../ no longer panic sell and buy and hold index in their 401ks...

 

but it's like someone says "hey i'm worried X may happen so i bought a little less of Y than usual or a sold B to buy C" and 12 months later..."oh my god that idiot thought X could have happened...this is why I'm rich and that idiot's not"

 

that idiot thougt tariff's would cause inflation which merriam webster's defines as a general continued increase in price, but they actual caused a one time increase in price on specific goods...man must be why he sucks. 

 

Edited February 10 by thepupil

[Gregmal]

10 minutes ago, thepupil said:

 

you have this way of taking one person's view or even a few people's musings while they think through something and turning it into this immutable extreme of a consensus with which you omnisciently and presciently disagreed. 

 

 

Idk, for the most part, I imagine the bulk of the board stayed invested in their companies throughout 2020 and 2025 and continued to compound their wealth.

 

maybe some raised some cash (unnecessarily  w/ hindsight), maybe some blew a few hundred bps on hedges (I did!), maybe some sold some businesses at local lows to buy things w/ less perceived risk and that was wrong.

 

for the most part, I don't think there was this kind of negative extreme strawman in either instance. i don't have visibility into others' portfolios of course, but have read articilaes on how even retail investors over time have gotten better and just bought through thick and thin.../ no longer panic sell and buy and hold index in their 401ks...

 

but it's like someone says "hey i'm worried X may happen so i bought a little less of Y than usual or a sold B to buy C" and 12 months later..."oh my god that idiot thought X could have happened...this is why I'm rich and that idiot's not"

 

that idiot thougt tariff's would cause inflation which merriam webster's defines as a general continued increase in price, but they actual caused a one time increase in price on specific goods...man must be why he sucks. 

 

The past 5 years, with the exception of 2024 which was pretty entirely boring on the drama front sans a few valuation calls, every year there’s been pretty strong and opinionated/spirited expressions made. Yes sometimes I group them together but we ve all been around long enough to see some epic ones. Sure, my generalities don’t apply perfectly to everyone, but there are definitely social collections of contras and .054 batting averages out there, who nevertheless show up to work the next day not only thinking “this time is different” but being completely void in recollection of their own track records. Sure, track records in terms of our personal accounts is not what I’m referring to; a fools game on the internet….but perhaps I am mistaken if the assumption is that people have money behind the convictions they express socially. There were a LOT of depression/recession/inflation calls in the Spring. None of that has bore out. 

Edited February 10 by Gregmal

[RichardGibbons]

59 minutes ago, gfp said:

A tax is not inflation

 

Yes, it is.  You genuinely believe that if Biden had decided to put a 10000% tax on the input costs of every item anyone could buy, prices would not have increased?  Those Nike sneakers that cost $18 to make now cost $1800 to make, but you think Nike will still be selling them for $120?

[Gregmal]

3 minutes ago, RichardGibbons said:

 

Yes, it is.  You genuinely believe that if Biden had decided to put a 10000% tax on the input costs of every item anyone could buy, prices would not have increased?  Those Nike sneakers that cost $18 to make now cost $1800 to make, but you think Nike will still be selling them for $120?

That would make selling Nikes impossible economically. A different phenomenon than inflation as it relates to monetary policy…

Edited February 10 by Gregmal

[gfp]

I thought we had a better grasp of monetary basics around here by now.

 

I am disappointed 

[Gregmal]

For real lmfao 

[thepupil]

1 hour ago, gfp said:

A tax is not inflation

 

can a tax be "inflationary" as it relates to the cost of something?

[cubsfan]

57 minutes ago, gfp said:

I thought we had a better grasp of monetary basics around here by now.

 

I am disappointed 

 

Hey at least it wasn't me this time! LOL

 

[RichardGibbons]

In economics, inflation is an increase in the average price of goods and services in terms of money.

 

Inflation refers to the general increase in prices or the money supply, both of which can cause the purchasing power of a currency to decline.

 

I mean, I guess you could decide to use a definition of inflation different than everyone else by deliberately excluding your politically-favoured causes of inflation. But it seems like a bad idea to me, because it makes you lose credibility and you end up with stupid conversations like this one.

 

And it's particularly weird when you posted Truflation numbers to claim that inflation was going down--an index based on prices. Like, why would you even care about Truflation when it's just based on price data when the core of your argument is that price increases aren't inflation?

Edited February 10 by RichardGibbons
Clarified last sentence.

[UK]

33 minutes ago, RichardGibbons said:

general increase in prices or the money supply

I think this kind of answers the question, because if you increase taxes/reduce deficits, these two should go down (slow), despite a few things which become more expensive?

 

Edited February 10 by UK

[TwoCitiesCapital]

Or that the truflation figures are still positive - implying YoY growth in prices (inflation). 

 

Just because the trend is slowing doesn't mean prices aren't still rising - or haven't risen - in response to policy. 

 

Prices were rising quickly when Trump was announcing tarriffs and are rising less quickly now that he's TACO'd out of the big numbers to smaller ones. Prices are still higher than 6-, 12-, or 18-months ago. #inflation

[Gregmal]

15 minutes ago, RichardGibbons said:

Like, why would you even care about Truflation when it's just based on price data when the core of your argument is that price increases aren't inflation?

Lol talk about the definition of pointlessly politely charged arguments and deliberately obstinate. 
 

The argument all along, clear as day is that the context around the increase is really what’s relevant. Mainly the role of price stability as it relates to supply and demand. 
 

This really is quite unbelievable. Even more so considering my inflation commentary has easily been the most consistent, not to mention accurate and actionable/on point in terms of pretty much anyone posting here now going back 5 years….

 

Why is shit so easy? Maybe it’s starting to make sense lol

[thepupil]

7 minutes ago, Gregmal said:

Lol talk about the definition of pointlessly politely charged arguments and deliberately obstinate. 
 

The argument all along, clear as day is that the context around the increase is really what’s relevant. Mainly the role of price stability as it relates to supply and demand. 
 

This really is quite unbelievable. Even more so considering my inflation commentary has easily been the most consistent, not to mention accurate and actionable/on point in terms of pretty much anyone posting here now going back 5 years….

 

Why is shit so easy? Maybe it’s starting to make sense lol

 

I think I'm just dumb or deliberately obstinate (perhaps obtuse as well), because I don't really know what "the context around the increase" or the "role of price stability as it relates to supply and demand" means...are you saying that inflation doesn't exist? hasn't existed to the degree others believe? has causes which are different than others think?

 

feel like i'm reading a vaguepost tweet. 

 

 

 

Edited February 10 by thepupil

[Gregmal]

19 minutes ago, thepupil said:

 

I think I'm just dumb or deliberately obstinate (perhaps obtuse as well), because I don't really know what "the context around the increase" or the "role of price stability as it relates to supply and demand" means...are you saying that inflation doesn't exist? hasn't existed to the degree others believe? has causes which are different than others think?

 

feel like i'm reading a vaguepost tweet. 

 

 

 

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

Elevator summary; first wave inflation during Covid was real Fed feared type inspired by free covid money and government induced supply chain problems. Once that was working itself out of the system the remainder was largely housing related caused by higher rates…Do these idiots who take the simpleton definition/approach wanna sit here with a straight face and argue that rate hike caused inflation mandates the Fed to further raise rates to fight inflation lmfao?!?! This last wave if you wanna even call it that(that last post before yours and mine seems to imply that oh boy the “inflation” goalposts have moved again to basically “anything above zero”) but by my counts right now there’s marginally elevated inflation still present due to higher rates but generally speaking, 2-3% inflation as we currently see is a total nothing burger. 

Edited February 10 by Gregmal

[Gregmal]

But generally speaking, it’s ok if not everybody gets it. 

[RichardGibbons]

Oh, I see--you want credit for scoring a goal.

 

If that's the case, I'll give you 100% credit. I think you were the person who, about a year ago, kind of predicted what might happen with inflation, and what you predicted mostly happened. You were the closest to correct that I can remember of anyone on the thread.  Good job, and thanks for sharing your viewpoints.

 

(And since it isn't always clear, I'm not being sarcastic at all. I genuinely believe what I said in the previous paragraph, though it's possible someone else was more correct, and I just forgot.)

[Gregmal]

18 minutes ago, RichardGibbons said:

Oh, I see--you want credit for scoring a goal.

 

If that's the case, I'll give you 100% credit. I think you were the person who, about a year ago, kind of predicted what might happen with inflation, and what you predicted mostly happened. You were the closest to correct that I can remember of anyone on the thread.  Good job, and thanks for sharing your viewpoints.

 

(And since it isn't always clear, I'm not being sarcastic at all. I genuinely believe what I said in the previous paragraph, though it's possible someone else was more correct, and I just forgot.)

It's actually more a matter of accountability and making assessments, putting time into them. debating them with people, and then being able to admit how it played out when the dust settles. It's pretty clear most of the dust has settled on a lot of those claims. And for some reason some just cant seem to reckon with that. Mainly I assume because some simply cant get over their politician itch to "never agree" on anything with other posters....The original @gfp part related to the "youre an idiot owning a bond with duration" claims made on this same thread. The Hampton call. We touched on others. The impending Depression. The dollar losing reserve currency crap; soaring inflation. If you were a proponent of that narrative, it was a loser. Thats all. The past bunch of comments/pages seem to be mealy mouthed nitpicking to save face from admitting as much. 

 

No greater example than an inflation call that doesnt pan out, which then turns into...2% inflation still means prices rose 2%.....

Edited February 10 by Gregmal

[RichardGibbons]

Yeah, that's fair. Accountability and post-mortems are worthwhile. I think the only narrative from that era that's still in the air is the reserve currency issue because that's something that's likely to play out over a decade, not a year. Outside of a World War, the world isn't going to shift from one reserve currency to another in a year.

[thepupil]

1 hour ago, Gregmal said:

It's actually more a matter of accountability and making assessments, putting time into them. debating them with people, and then being able to admit how it played out when the dust settles. It's pretty clear most of the dust has settled on a lot of those claims. And for some reason some just cant seem to reckon with that. Mainly I assume because some simply cant get over their politician itch to "never agree" on anything with other posters....The original @gfp part related to the "youre an idiot owning a bond with duration" claims made on this same thread. The Hampton call. We touched on others. The impending Depression. The dollar losing reserve currency crap; soaring inflation. If you were a proponent of that narrative, it was a loser. Thats all. The past bunch of comments/pages seem to be mealy mouthed nitpicking to save face from admitting as much. 

 

No greater example than an inflation call that doesnt pan out, which then turns into...2% inflation still means prices rose 2%.....

not sure where you’re measuring from, but

 

duration hasn’t really outperformed cash 

 

USD is significantly down against most currencies with exception of JPY.
 

Ex US equities significantly outperformed US stocks for first time in a while (continuing into 2026)…partly related to the currency moves 

 

completely agree with you that economic disaster and the more calamitous nodes of the probability tree have not come to fruition, but hard for me to look at what’s occurred and say USD bears or duration haters were wrong.

 

i personally love me some duration, but vacillate b/w bonds and international stocks as diversifier in my 401k…don’t own any bonds at moment…all ex US equities in my 401k, switched some time early last year…so far been correct in terms of returns, but still torn as to what actually helps portfolio more 

[Gregmal]

3 minutes ago, thepupil said:

duration hasn’t really outperformed cash 

Just picking out the most obvious one, as there’s many. (Not all specifically related to you)

 

But the above wasn’t the proclamation. Perhaps revisit some of the lectures @gfp got a while back. 
 

But basically all the above shift goalposts from “you’re an idiot for owning duration” and “inflation is gonna take off” to “they didnt outperform” and “inflation was 2%”…..

[thepupil]

On 4/12/2025 at 10:50 AM, thepupil said:

I bought TLT synthetic call on Friday, Jan 27 $70 puts are $2.5 or whatever. I’m sure that’s historically expensive. But cutting off the tail is implrtant to me given recent events. 
 

I think the duration sell off is mostly levered folks unwinding and it will reverse and there will potentially

be a nice bid for duration in a likely economic downturns.
 

over very long term, I think damage is done and th dollar/US’s status is diminished. but at least I’m short a mortgage in greater size…
 

But think a little early to conclude we’re spiraling into currency crisis/stagflation/etc.

yea…I’m just going to give up here…

 

i feel like this just continues a pattern of where I can’t help but disagree with almost everything you wrote (or at least the way it’s written) while having (I think) pretty similar positioning in terms of actual stuff that I like and own 

[Gregmal]

Well all ya gotta do is go back and read. Clearly if you owned duration, you know those bearish calls missed the market. Unless we re gonna do one of those ultra nitpicky nerd things where there’s a half dozen adjustments and the selectively chosen benchmarks…but when someone says I wouldn’t own something with a 10 foot pole and rates/inflation are certain to go higher when the 10 year in the mid 4s and inflation around 3….one would think common sense people could agree that stuff didnt happen. 

Edited February 11 by Gregmal

[thepupil]

13 hours ago, Gregmal said:

Well all ya gotta do is go back and read. Clearly if you owned duration, you know those bearish calls missed the market. Unless we re gonna do one of those ultra nitpicky nerd things where there’s a half dozen adjustments and the selectively chosen benchmarks…but when someone says I wouldn’t own something with a 10 foot pole and rates/inflation are certain to go higher when the 10 year in the mid 4s and inflation around 3….one would think common sense people could agree that stuff didnt happen. 

 

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)

 

 

Like I started this whole thread, based on the idea that bonds "were becoming" an alternative to stocks which probably wouldn't perform as well going forward...

 

let's check in on that

 

TLT has lose 4%/yr

Bonds have made 2.8%/yr

cash has made 4.3%/yr

 

SPY did 13.8% / yr

VT did 13.3% / yr

GLD did 27.7% / yr. 

 

so for nearly four years, this view of starting to be okay w/ bonds has been wrong...to a pretty big degree....may change going forward of course.

 

 

 

 

 

Edited February 11 by thepupil

[rogermunibond]

 

 

Economy strong - 10Y should be higher

 

Edited February 11 by rogermunibond