|
|
Post by yogibearbull on Jul 2, 2023 17:54:21 GMT
Fearchar , your take on this Buffett's Problem is interesting. But my estimate for his T-Bill rolls is much smaller. Treasury has weekly 4wk, 8wk, 13wk, 17wk, 26wk T-Bill options. Then there are monthly 52wk auctions. That is 5+ auction dates per week, or 5 x 52 + 12 = 272 auction dates for T-Bills. Let us ignore the ad-hoc auctions for CMBs. So, in a steady state, assuming $100 billion holdings in T-Bills, he is rolling on average $368 million per T-Bill auction date. That is still way above $10 million max for noncompetitive orders. But we don't know how many BRK or subsidiary accounts are used. Still, he has to use a combo of noncompetitive and competitive orders. I wonder if someone from the Treasury or authorized Treasury dealers (25 only) gets in touch with WB ahead of auctions to see what he needs. I can imagine WB hiring a team of min wage clerks who just keep track of this.
|
|
|
|
Post by Fearchar on Jul 2, 2023 19:09:42 GMT
yogibearbull , In this interview, Warren explains T-Bill purchases: PUBLISHED WED, APR 12 2023 3:12 PM EDT WARREN BUFFETT: Well, Becky, on Good Friday, I was working. Marc Millard, who handles all the bonds and stock prices for the whole for all of Berkshire was there. And I knew I was leaving town on Sunday night. And Marc says, “What do we do next week?” And I said, “Here’s what we do.” And on Monday, we always buy Treasury bills. We bought about 2 billion of ‘em. We got a 499 percent bond equivalent yield. And but the only question is whether we buy three months or six months. And I tell him to use his own judgment on that. So Monday, I was here. And he sends me a sheet as to what we did. And I don’t change anything. Tuesday, he does the same thing. And net, we happen to be a net seller of 300-and-somethin’-million-dollars, but we coulda been a net buyer of $500 million in stocks. And I am not going to, I’m gonna be traveling tomorrow or, and, you know, he’s gonna be operating it on Wednesday. And I’m not changing any instructions to him. He’s gonna keep doing what he’s been doing. I mean, I we don’t make our decisions as to whether to own part of a company for the next 20 years. We don’t have any idea what anybody’s gonna do next week or next month. And I was buying Berkshire and between 1962 and 1965 of control did we have anything to do with, you know, all kinds of things were happening in the economic markets all the time. And but we haven’t changed our course, you know, in 58 years. And we just wanna buy good businesses run by people we like and trust and at a decent price. And we’ll keep doing that. And we’ll keep buying Treasury bills every Monday, and we haven’t missed a Monday yet. And we keep all our money short. We keep it in Treasuries. And we were getting four basis points, which was $40 million on $100 billion worth. And now we get almost 5%, which is $5 billion. So we’ve got 100 times the earnings. But it doesn’t make any difference. I mean, that is there to be the strongest company you can imagine. And also, to take opportunities when they come along. But Marc, if you’re listening, just keep doing the same thing you were doing yesterday and the day before. And I could go away for a couple weeks and I would tell him, “Here’s what we oughta do on the buy side. Here’s what we wanna do on the sell side, and just keep doing it.” And that’s what we do. And some periods there was a period about a year ago, I mean, incredible volumes were. We bought 20% of a company that already, the index funds owned, you know, 25% or 30%, Dodge & Cox owned 10%. And we bought 20% of the company in a month or something like that. Now— BECKY QUICK: Occidental, you said? WARREN BUFFETT: Yeah, it was Occidental.
|
|
|
|
Post by steadyeddy on Jul 2, 2023 19:31:37 GMT
I placed my first ever US treasuries order(s). I evenly split the money I was going to invest across the 3 durations: 6 weeks, 13 weeks and 6 months.
I do have an unanswered question: with MM funds having very competitive yields and ready access to money, what is that the Treasuries offer additionally?
|
|
|
|
Post by yogibearbull on Jul 2, 2023 19:40:45 GMT
|
|
|
|
Post by steadyeddy on Jul 2, 2023 20:03:43 GMT
yogibearbull , no these orders are for new Treasury issues. There is a "42-day cash management bill" listed which I thought is a 6wk Treasury auction, am I wrong? And this time I placed the orders from an IRA so no state/local tax benefit.
|
|
|
|
Post by yogibearbull on Jul 2, 2023 20:07:25 GMT
You are Ok. Thanks for clarifying.
Cash management bills (CMBs) are issued on ad-hoc basis, so don't appear in the Treasury Auction Schedule. Some brokerages don't even offer CMB auctions on their platforms.
|
|
|
|
Post by steadyeddy on Jul 2, 2023 20:34:25 GMT
You are Ok. Thanks for clarifying. Cash management bills (CMBs) are issued on ad-hoc basis, so don't appear in the Treasury Auction Schedule. Some brokerages don't even offer CMB auctions on their platforms. When I placed the orders on e*Trade, they did not ask if I want to auto-roll. I suppose they will be one-time purchases? |
|
|
|
Post by yogibearbull on Jul 2, 2023 20:43:13 GMT
Not everyone offers auto-roll. Fido had it for a long time, Schwab started it just 1-2 yrs ago, Vanguard still doesn't offer it (I now have brokerage a/c at these 3). So, I am not surprised that E*Trade didn't offer it.
I don't use auto-roll but did try it once. Basically, you enroll into it, but cannot change anything during (e.g. trade in the secondary market, if needed) or after (i.e. auto-roll is into like Treasury only, 13wk into 13wk, or 52wk into 52wk only) although you can cancel it anytime.
It hardly takes anytime to do the manual roll. I note down the maturity dates on my calendar and do the roll a few days BEFORE that.
|
|
|
|
Post by steadyeddy on Jul 2, 2023 21:09:25 GMT
Not everyone offers auto-roll. Fido had it for a long time, Schwab started it just 1-2 yrs ago, Vanguard still doesn't offer it (I now have brokerage a/c at these 3). So, I am not surprised that E*Trade didn't offer it. I don't use auto-roll but did try it once. Basically, you enroll into it, but cannot change anything during (e.g. trade in the secondary market, if needed) or after (i.e. auto-roll is into like Treasury only, 13wk into 13wk, or 52wk into 52wk only) although you can cancel it anytime. It hardly takes anytime to do the manual roll. I note down the maturity dates on my calendar and do the roll a few days BEFORE that. Thanks for explaining the nuances of auto-roll and its availability at various brokerages! |
|
|
|
Post by anitya on Jul 2, 2023 22:45:01 GMT
You already know most of my fixed income is in Treasury Obligations.
On Friday, I called somebody I used to work with many years ago and asked him how far out on the curve he and his clients are going. He said his clients own zero fixed income (incl Treasuries). I asked him about his portfolio and the same answer. He is worth mid to high 8 figures and his clients are worth 9 and 10 figures. Evidently, they are 100% in equities (either publicly traded or start ups), not counting real estate and such. Their uninvested cash sits in money markets (I presume sweep account) waiting for the next investing opportunity and they never worry about how much MM are paying during that time.
I quizzed him a bit more to see if he is being guarded. No.
May be the above is a Bay Area thing.
|
|
|
|
Post by steadyeddy on Jul 3, 2023 0:23:27 GMT
You already know most of my fixed income is in Treasury Obligations. On Friday, I called somebody I used to work with many years ago and asked him how far out on the curve he and his clients are going. He said his clients own zero fixed income (incl Treasuries). I asked him about his portfolio and the same answer. He is worth mid to high 8 figures and his clients are worth 9 and 10 figures. Evidently, they are 100% in equities (either publicly traded or start ups), not counting real estate and such. Their uninvested cash sits in money markets (I presume sweep account) waiting for the next investing opportunity and they never worry about how much MM are paying during that time. I quizzed him a bit more to see if he is being guarded. No. May be the above is a Bay Area thing. Did you ask them how they fared in 2022? |
|
|
|
Post by chang on Sept 30, 2023 16:30:51 GMT
|
|
|
|
Post by anitya on Sept 30, 2023 20:08:27 GMT
I know RPHIX has held up well in down markets in the past. USFR or 6 month Treasuries yield 5.5 - 5.6%. With 80% equity exposure, what marginal benefit is RPHIX adding to your portfolio. Share your thinking here or in PM. |
|
|
|
Post by chang on Oct 1, 2023 7:57:52 GMT
I know RPHIX has held up well in down markets in the past. USFR or 6 month Treasuries yield 5.5 - 5.6%. With 80% equity exposure, what marginal benefit is RPHIX adding to your portfolio. Share your thinking here or in PM. No deep thinking here. Just look at the history of the fund. It's the poster boy for a "sleep easy" investment. No need for me to spend hours searching through Treasuries, waiting for auction dates, worrying about rollovers, etc. It's just cash. As long as interest rates and yields are rising, I don't get the "buy LT now" argument. |
|
|
|
Post by FD1000 on Oct 1, 2023 11:55:27 GMT
+1
And why I never bought CD/treasuries. I always found good ris/reward mutual funds or used MM to park my cash and wait for the next good trade.
If T-bill pays 5%, I'm sure I can find funds that will make more.
If rates do down, the 1,3 year T-bill will pay the same, but a bond fund will make much more.
It makes more sense to me when someone,not me, owns high paying T-bill for 5+ years
Sure, mutual funds are not guaranteed but I rather take the chance.
In the last year, MM paid not far from CD/T-bill and proved my point. I don't want to lock myself.
|
|
|
|
Post by Chahta on Oct 1, 2023 11:56:13 GMT
You already know most of my fixed income is in Treasury Obligations. On Friday, I called somebody I used to work with many years ago and asked him how far out on the curve he and his clients are going. He said his clients own zero fixed income (incl Treasuries). I asked him about his portfolio and the same answer. He is worth mid to high 8 figures and his clients are worth 9 and 10 figures. Evidently, they are 100% in equities (either publicly traded or start ups), not counting real estate and such. Their uninvested cash sits in money markets (I presume sweep account) waiting for the next investing opportunity and they never worry about how much MM are paying during that time. I quizzed him a bit more to see if he is being guarded. No. May be the above is a Bay Area thing. This a bit old for responding, but here I go. Wealthy people don't necessarily think the way us small-timers do. They look out to the future not worrying about the current Treasury auctions. If equities are a good deal they buy and hold. They don't need income or ST gains. On BB and other sites it is more about holding onto what we have and very ST thinking. Just my observations. Cheers. |
|
|
|
Post by yogibearbull on Oct 1, 2023 13:15:37 GMT
There is an opportunity once every month to setup 3m, 6m (Monday Auction) and 1y (Tuesday Auction) T-Bill ladder with Auctions; 9m may be added with secondary purchase.
I am still debating whether to roll 3m into 6m (Monday) or 1y (Tuesday) or buy Treasury FRN USFR or just leave in Schwab M-Mkt.
|
|
|
|
Post by yogibearbull on Oct 3, 2023 12:42:04 GMT
BTW, I decided NOT to roll into T-Bills. I will wait in ultra-ST FRN USFR or m-mkt Schwab prime SWVXX and will look for some opportunities in bond OEFs/CEFs.
We are at an interesting juncture in rates. With ST rates stable (despite Fed actions) and LT rates rising, there is some panic in the bond market. JPM's Jamie Dimon is worried about 7% 10-yr; some dude at CNBC (RS) is worrying about double-digit treasuries. And bond-proxy utilities XLU has been trashed, double-trashed. Of course, utilities have another reason beyond the rates - after NEE warning, investors are doubting the growth-utilities model (NEE was the top growth-utility via renewables), and when growth goes out, watch out the related stocks, whether utilities or tech or Nasdaq or AI or cryptos.
|
|
|
|
Post by racqueteer on Oct 3, 2023 14:41:57 GMT
BTW, I decided NOT to roll into T-Bills. I will wait in ultra-ST FRN USFR or m-mkt Schwab prime SWVXX and will look for some opportunities in bond OEFs/CEFs. Reassuring to see you thinking along the same lines as I. I think the longer-dated T-Bills may, at some point, become compelling; that's when things might get interesting for everyone! |
|
|
|
Post by anitya on Oct 3, 2023 16:02:04 GMT
YTD comparative chart for RPHIX and USFR is interesting. I can not post charts.
|
|
|
|
Post by teapot on Oct 6, 2023 16:14:46 GMT
autoroll helps in 401K brokerage account where it won't count the incoming maturing bond in a few days if you place an auction order yourself. Without autoroll, your money will wait for a week to get into the same auction.
Schwab autoroll is not the same as fido. The order will be automatic but only after the current bond matures. It still wait for a week.
|
|
|
|
Post by retiredat48 on Oct 10, 2023 14:23:00 GMT
yogibearbull , Fearchar , steadyeddy , anitya , chang , FD1000 , Chahta , racqueteer , teapot , Posted the following on Fido forum----- OK, time for some accountability. Over a month ago, (27 Sept) I posted the following: "The investor demand for a 5% ten year treasury will likely be very large. Suggest those contemplating buying some for long term portfolio holdings, consider front-running, and buy at 4.9% or above...if it even gets to that yield. Treasury yield/bond prices have cyclic swings, same as stocks. Most likely a bottom in price forming soon, as investors grin from the sidelines in their money market funds. To me, I would define success as those who get locked into longer duration stuff, at very favorable and durable yields. At least that is my goal. Disclosure: Had a son-in-law email me yesterday saying he bought two year and five year treasury bonds, locking in the yield. Atta boy. (He and my daughter, each age 53, are "retiring" in a year and will spend some of this income) ----------------------------------------------------------------------------------------------- Wow, so far, spot-on. So 6 days ago, google shows the ten year Treasury peaked at 4.884% yield. (4.9% rounded). And apparently strong buying came in. Current available rate is 4.69%. Still time to lock in a decent rate that will help many portfolios for next decade. Not useful to plan on buying at absolute peaks or bottoms. For those who planned on buying, and were playing golf that peak day last Wednesday, I hope you gave up lunch and went home and bought the ten year bond, or a like fund! Good day... Edit to add: Now, on a more serious note, I am trying on my full KEN outfit (think Barbie and Ken); love it. Using it to attend a nephew's costumed wedding in Austin Texas this weekend. I'm giving the couple a two-for-one coupon gift...buy the Dallas Cowboys and Texas Longhorns; two for one! Free shipping. :  R48
|
|
|
|
Post by chang on Oct 12, 2023 17:13:17 GMT
yogibearbull , Fearchar , steadyeddy , anitya , chang , FD1000 , Chahta , racqueteer , teapot , Posted the following on Fido forum----- OK, time for some accountability. Over a month ago, (27 Sept) I posted the following: "The investor demand for a 5% ten year treasury will likely be very large. Suggest those contemplating buying some for long term portfolio holdings, consider front-running, and buy at 4.9% or above...if it even gets to that yield. Treasury yield/bond prices have cyclic swings, same as stocks. Most likely a bottom in price forming soon, as investors grin from the sidelines in their money market funds. To me, I would define success as those who get locked into longer duration stuff, at very favorable and durable yields. At least that is my goal. Disclosure: Had a son-in-law email me yesterday saying he bought two year and five year treasury bonds, locking in the yield. Atta boy. (He and my daughter, each age 53, are "retiring" in a year and will spend some of this income) ----------------------------------------------------------------------------------------------- Wow, so far, spot-on. So 6 days ago, google shows the ten year Treasury peaked at 4.884% yield. (4.9% rounded). And apparently strong buying came in. Current available rate is 4.69%. Still time to lock in a decent rate that will help many portfolios for next decade. Not useful to plan on buying at absolute peaks or bottoms. For those who planned on buying, and were playing golf that peak day last Wednesday, I hope you gave up lunch and went home and bought the ten year bond, or a like fund! Good day... Edit to add: Now, on a more serious note, I am trying on my full KEN outfit (think Barbie and Ken); love it. Using it to attend a nephew's costumed wedding in Austin Texas this weekend. I'm giving the couple a two-for-one coupon gift...buy the Dallas Cowboys and Texas Longhorns; two for one! Free shipping. : R48 It may be too early to declare victory. If the 10Y stays at 4.7% while the 6M stays at 5.6% for, let’s say, six months - then I’d rather own the 6M. That’s an extra 1/2% over the period, or $5,000 on a million. If rates stay pat, I’d rather stay on top of the yield curve. And that’s exactly what I’m doing, as long as the Fed is either raising rates or holding rates. So far, I have been happy with this approach. If I’d dived into the 10Y at 4%, I wouldn’t be so happy. |
|
|
|
Post by chang on Oct 13, 2023 11:05:48 GMT
Interesting. Only a week ago, the 3M T-bill auction yielded more than the 6M, so I bought the 3M. It settled at 5.503283%.
Now I have another T-bill maturing at VG, and I just checked the rates. According to VG, the expected yields on the 3M are 5.490% and the 6M 5.557%. So the yield curve just got a little less inverted in one week. (And the 3M went down.)
So I just put an order in to buy the 6M. Won't know the actual yield until it settles.
|
|
|
|
Post by django on Oct 13, 2023 11:53:31 GMT
Interesting. Only a week ago, the 3M T-bill auction yielded more than the 6M, so I bought the 3M. It settled at 5.503283%.Now I have another T-bill maturing at VG, and I just checked the rates. According to VG, the expected yields on the 3M are 5.490% and the 6M 5.557%. So the yield curve just got a little less inverted in one week. (And the 3M went down.) So I just put an order in to buy the 6M. Won't know the actual yield until it settles. I recently learned about Fidelity's Income Analysis tool. I usually access Fido through my phone app, it's only available on the website, so I was unaware of it. Although it has limitations with T-Bills and estimated income, it does give you the total amount invested and your average weighted yield. It also lists each Bill by maturity date, maturity dates are not shown in your account, so that's a handy feature for planning purposes. Check it out if you use Fidelity. |
|
|
|
Post by yogibearbull on Oct 13, 2023 12:26:54 GMT
Treasury Scene Now For EOD quotes on 3m (main chart) and 6m (panel below) T-Bills, see this link, stockcharts.com/h-sc/ui?s=%24UST3M&p=D&b=5&g=0&id=p33602294627For LIVE quotes for 3m, use $IRX. Scale is 10x. Monday Auction will have its own rate determination based on the orders received and those should be OK (with Buffett/BRK alone buying billions), but 30-yr Auction this week was poor (notable even though no one here is buying 30-yr). 5-yr TIPS Auction is also next week - est 2.46% + inflation may be good for some. Obviously, that is for 5-yr hold. That compares favorably with 5-yr nominal at 4.69%. |
|
|
|
Post by django on Oct 13, 2023 13:26:05 GMT
I planned on participating in the next 5 yr. TIPS auction, I had participated in last two. Although I know the losses on previous purchases will not be realized if I hold to maturity, it's still depressing to see that decline in value everytime I log in to my account.
|
|
|
|
Post by richardsok on Oct 13, 2023 13:54:39 GMT
I planned on participating in the next 5 yr. TIPS auction, I had participated in last two. Although I know the losses on previous purchases will not be realized if I hold to maturity, it's still depressing to see that decline in value everytime I log in to my account. Trust me. We all know the feeling. |
|
|
|
Post by yogibearbull on Oct 15, 2023 16:13:33 GMT
|
|
|
|
Post by django on Oct 17, 2023 17:45:59 GMT
I posted on the Buy/Sell thread I have moved towards my final portfolio. TIPS are confusing to me, and I know much more than my heirs, so I've decided to pass on the next auction. I also believe Tipswatch David Enna has thought every past TIPS auction was a solid investment opportunity. He may be biased. |
|
