The most frequently asked question right now is how the presidential election is going to impact the stock market. What is really being asked is, “Should I sell out now and get back in later?” Who knows what is going to happen in the market… Here’s what we do know. While everyone continues to ask the question about how overvalued the market is and how volatile it might be over… Read More
The Last Word on Bonds…For Now
In Howard Marks latest memo, Time for Thinking, he makes the following observation: Lower interest rates increase the discounted present value of future cash flows and reduce the a priori return demanded from every investment. In layman’s terms, when the fed funds rate is zero, 6% bonds look like a giveaway, so buyers bid them up until they yield less (thus I believe 97% of outstanding bonds yield less than… Read More
Is this the last hurrah for bonds?
Recently, I have written quite a bit about the long-term return expectations for investing in bonds. See here, here, here and here. Spoiler alert: I don’t think it’s good. But long-term bonds this year have been quite an amazing story as the COVID pandemic has caused the Fed to take historically monumental actions. As a result, we’ve watched long-term Treasuries tear the roof off the market. For instance, a 20+… Read More
