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Post by retiredat48 on Oct 2, 2023 15:23:12 GMT
I don't have an immediate reference, but my learning over the decades is that bonds go in approx 35 year bull/bear cycles...falling/rising rates. So this is about 70+ years in total cycle. There are also assessments of bond fundamental reasons why this is so. BTW There are theories that economies go in four fundamental cycles, lasting 25 years each (100 total) whereby history repeats itself. A reference being read by top CEOs and the Elon Musks of the world is: The Fourth Turning...by historian Neil Howe and the social scientist Peter Turchin. They consider we have just entered the fourth turning, the worst for society in the ebbs and flows of history. The fourth ends badly, just like the great depression of a hundred years ago back from the 4th turning cycle. Then recovery, and the cycle starts over again. I have read the book, and value the historical perspective. R48 , This is the link to Lifecourse Associates. Among the founders are the authors of both "Generations" (their first book) and "The Fourth Turning" I have read both books and this site describes the process you related to in some detail. Nice to meet someone else who has studied this subject. ,...Hi...thanks for the link. Step up to the bar and join me for a drink.  Yes, I spend most of my time on big-picture stuff versus daily market changes...even though I tend to have CNBC on in the background a lot! From this I develop investment strategies and themes, and adjust portfolios for me and my kids accordingly. Themes for my kids (age 50's) are to not work forever (they are retiring within 1-5 years); and focus on return OF capital instead of return ON capital. That is, how to preserve what has been accumulated by the family. Answer questions such as: Are we really as wealthy as the dollar numbers suggest? Or will it be taken away from millions of people by some economic situation, and how to hedge for this? (inflation being just one). They should be far more concerned than I am at my stage of living. BTW My kids and grandkids will be managing a FAMILY CHARITABLE FOUNDATION I will be funding via the selling of my upstate NY third home...monies going to charities. (A real foundation; not a bogus one). So they have a need to know financial stuff and world trends. Good to discuss... R48 |
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Post by anitya on Oct 2, 2023 16:00:04 GMT
anitya and newtecher from your posts I see that you disagree with my position. I respect that and will agree to disagree. I wish you well. Who am I to disagree with anybody about what will happen in the future. I took your hypothesis about reversion to mean as a given and provided a data series that covers multiple cycles, rather than the sources you used which covered one cycle (1 datum). I also think reversion through the mean (which you implied in your original post) is probably more likely to happen than reversion to the mean if past is a prologue to the future. So, where is the disagreement: in the methodology or in the conclusions? I did not catch how newtecher post is correlated to what I posted. |
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Post by anitya on Oct 2, 2023 19:00:36 GMT
Premiums for TLT calls expiring 2 yrs out and ATM are about 15%. That is very expensive to my eye when I add in the current 20 yr treasury yields. Of course, demand does not always translate into higher prices. Fund inflows are a good example. TLT inflows YTD $17.2B and 1W inflow is $1.25B - total AUM is only $39B.
Of course, XLU had daily net outflows for the last seven trading days.
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Post by anitya on Oct 3, 2023 7:42:37 GMT
History of global interest rates going back to 3,000 B.C. from Bank of England! For context, Buddha lived during 5th century B.C.
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Post by FD1000 on Oct 3, 2023 13:16:07 GMT
Unfortunately, history doesn't repeat itself accurately and can't predict the next 1-3-6 months and more.
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Post by anitya on Oct 3, 2023 16:14:11 GMT
Unfortunately, history doesn't repeat itself accurately and can't predict the next 1-3-6 months and more. This should be the final sentence in every post (in every forum) about markets, investing, prices, etc. |
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Post by catdog on Oct 3, 2023 16:55:50 GMT
Anitya,
If todays selloff is any indication, XLU may be beginning to act more like a utility. Not much consolation to you, but perhaps something to watch.
Catdog
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Post by Norbert on Oct 3, 2023 17:07:23 GMT
Unfortunately, history doesn't repeat itself accurately and can't predict the next 1-3-6 months and more. This should be the final sentence in every post (in every forum) about markets, investing, prices, etc. Obviously, we can't accurately predict the future. Do we need to repeat it 10 times per day?
But, we can think about market conditions; about whether a market is cheap or expensive; about increasing or decreasing liquidity. That stuff matters. When governments were pumping money into the economy (think 2009 subprime recovery or the 2020 Covid recovery), the markets exploded upwards. Those were tradable events.
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Post by anitya on Oct 3, 2023 19:39:30 GMT
Anitya, If todays selloff is any indication, XLU may be beginning to act more like a utility. Not much consolation to you, but perhaps something to watch. Catdog Good observation. XLU is acting like a capitulation today. Yesterday was 5 times avg volume and today was 4 times avg volume but I think today's price action was a lot better than Thursday or yesterday to assume it is a capitulation. I did save money selling a few hours after buying on Thursday. But as you guessed, my bad habits do not die so easily and I did bite today, not enough to kill me if it turns out to be poison. 10 yr not being yet at 5% makes me think today may only be a temporary reversal for XLU. |
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Post by uncleharley on Oct 3, 2023 20:41:19 GMT
Anitya, If todays selloff is any indication, XLU may be beginning to act more like a utility. Not much consolation to you, but perhaps something to watch. Catdog Good observation. XLU is acting like a capitulation today. Yesterday was 5 times avg volume and today was 4 times avg volume but I think today's price action was a lot better than Thursday or yesterday to assume it is a capitulation. I did save money selling a few hours after buying on Thursday. But as you guessed, my bad habits do not die so easily and I did bite today, not enough to kill me if it turns out to be poison. 10 yr not being yet at 5% makes me think today may only be a temporary reversal for XLU. DON'T YOU CATCH NO FALLING KNIVES!!! |
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Post by archer on Oct 3, 2023 21:12:40 GMT
I heard or read somewhere recently (hopefully I'm not repeating something I found on this forum)that much of XLU investment is for divs. For growth it is the historical laggard of all the sectors. With no risk MM returns being what they are, perhaps there is a mass exodus from XLU to cash for income. At some point the big boys will decide the knife has fallen far enough. I'll probably wait until the next peak to buy.  |
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Post by catdog on Oct 3, 2023 21:41:55 GMT
Of the larger utilities I think that NEE and AEP are looked at as possible growth, but the rest are mostly dividend payers. Green energy seems like a wild card that clouds the waters with utilities.
Catdog
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Post by anitya on Oct 3, 2023 22:08:22 GMT
Anybody biting 20 yr Treasury at 5.12%?
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Post by newtecher on Oct 3, 2023 23:07:54 GMT
Anybody biting 20 yr Treasury at 5.12%? You can get get STRIPS (zero-coupon treasuries) maturing in 2041 with a 5.3% yield, which is more than the current fed funds rate. Crazy and will not last long. I am will probably be done deploying the rest of cash within the next week. |
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Post by anitya on Oct 3, 2023 23:44:05 GMT
Anybody biting 20 yr Treasury at 5.12%? You can get get STRIPS (zero-coupon treasuries) maturing in 2041 with a 5.3% yield, which is more than the fed funds rate. Crazy and will not last long. I am will probably be done deploying the rest of cash withing the next week. Do you by any chance know if the strips exempt from State income tax, like Treasury bills are? |
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Post by yogibearbull on Oct 3, 2023 23:53:19 GMT
anitya , see finance.zacks.com/tax-treasury-strips-7266.htmlState Income TaxesInterest earned from Treasury securities is exempt from state and local income taxes. The imputed Treasury STRIP interest you must report each year for your federal taxes is also exempt. Do not include the 1099 interest from your STRIP investments in your taxable income when filing state taxes. The state tax exemption results in a higher after-tax yield from Treasury securities when compared to other, fully taxable bonds.
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Post by anitya on Oct 4, 2023 0:22:15 GMT
anitya , see finance.zacks.com/tax-treasury-strips-7266.htmlState Income TaxesInterest earned from Treasury securities is exempt from state and local income taxes. The imputed Treasury STRIP interest you must report each year for your federal taxes is also exempt. Do not include the 1099 interest from your STRIP investments in your taxable income when filing state taxes. The state tax exemption results in a higher after-tax yield from Treasury securities when compared to other, fully taxable bonds. Thanks. If the state tax exemption pays for my loss of CG and QD federal tax treatment I would have received from investing in stocks, investing in these Treasury instruments will give me a good 65-70% of the long run stock returns without any risk, allowing one to drop equity allocation below target. Something for me to think about. Edit: The next vote for Speaker is not until a week from now. Enough time for instability turmoil in the markets! |
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