Buy High, Sell Low

Bonds have been getting a lot of attention lately. With more inflows to fixed income funds, and yields on treasuries that only seem to go in one direction, discussion of whether a bubble exists has taken center stage. I, myself, used the term bubble in my last post - in retrospect, I was being too cavalier with the written word. To clarify, I continue to believe that bonds (especially, US treasuries) are a bad investment. Eventually, they will have their day of reckoning. But, while use of the term "bubble" conjures up certain images of investor behavior, it was not quite what I was driving at. Simply, I was trying to draw a bad parallel to real estate, where euphoria trumped reason. In the case of bonds, it is fear that's driving the investment, and the mistaken calculation that deflation is the likely outcome. But, unlike real estate. and as David Rosenberg pointed out today in his missive, it is not a levered trade and sentiment is not at irrationaly exuberant levels. Nevertheless, bubble or probably not, I hold fast to my position that bonds stink.