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I mean, the 'stocks are cheap relative to bonds' is probably of one of most played out themes/crowded ideas right now. Taking some off the table seems prudent to me

The idea here is, if anyone bought Swiss or German bunds 4 years ago and went into a coma, a coma that he came out of today, he almost surely would be taking most (if not all) the profits from the trade and anyone would agree with doing that. What I'm suggesting here, a small short in the...

any cheap ways to put this trade on with options?

By being short the german futures, in theory, one is getting paid Euribor and paying out the bond yield right? So what is the carry now on rolling bunds and buxls futures?

JGBs are more complicated, because they are capping yields there. The 'risk' to a short in Swiss or EU bonds is that they do the same there

I mean, is any doubt out there that if global rates pop 100bps stock markets will have a fairly nasty correction? There COULD be a hedge in being long 30y US bonds against a stock portfolio (although I suspect this has reached its limit) but I sure heck know that there is no hedge in being long...

Most people are pricing stocks relative to interest rates, they look a earnings yields, dividend yields, compare it to bonds and say stocks are the place to be. But when global bond yields rise this will hurt them badly as stocks stop being cheap relative to interest rates. Being long stocks has...

Thank you. Which other emerging markets are you invested in? I considered going long Russia but I figured, I take enough EM risk already due living and being invested in brazilian assets that's probably good enough EM risk in a portfolio

That said, I'm not in love with the idea of shorting a price extreme. GBX is down like 12 points in a few weeks and I doubt central banks will let bonds just keep going down, at some point they will back stop it. So the key here, is to come up with some ideas in how to structure a trade that has...

Its no big deal though, I can just buy more US long-term cash bonds (with a lot of duration) and effectively decrease the size of my short in duration. There is the spread risk but come on, US bonds a lot of better value than German bonds trading at ridiculous levels

I was able to find 3 IB futures so far to put a trade like this on GBL (bund futures), GBX (buxl futures) and CONF (Swiss bonds futures). But that Swiss one is only for 8-12 year bonds. The one I like the most is GBX, the problem is that the contract is a bit expensive (180K EUR) which makes...

If you consider that long-term expected returns 4-5% of the S&P500 (along with the 2% dividend yield), the 2.3% of 30y UST bonds, shorting long-term negative yielding bonds is a very cheap hedge in a relative basis. The key is to not be upset if they rally, just remember that being long stocks...

One reason I suspect why this is a good trade is how little time we had to put the trade on, those 50y swissies didnt stay negative for very long. I think this was the smart money positioning themselves in that market. Now the yield charts on swiss, german and japanese government bonds are...

I mean, if someone is long 50% in stocks, what is the true risk of holding a short in long-term bonds of 20-30%? Probably not much, a loss in that trade is probably offset by a capital gain in the stock side. But if things fall out of bed, that could prove a very good hedge to have on. I just...

about these bonds, i tend to agree. I was actually thinking (with my comments on stocks being longs by proxy) that it could be a good idea to hedge a stock portfolio, to be short long-term swiss bonds (or german or japanese). It has been a bad trade for a long-time. But these levels, the risk...

But one thing I got to say, back in the day this journal had a lot of participation. Lots of people would discuss ideas (even if to flame ideas they disagreed with) and trades. These days I feel like I'm talking to myself! Please, lets get involved people. I developed an approach (All...

I really think December Fed futures are priced almost perfectly right now. The only edge there is if you sit in the FOMC

So I was reading back this journal from the beginining to review some of the studies/trades/ideas from back in the day. Its absolutely hilarious I didnt remember all that stuff but its just ralph00 over and over again flaming me for suggesting the Fed would keep rates at 0% in 2011! (lol) We...

If a lot of people think stocks are cheap relative to interest rates and they hate bonds, aren't they long bonds by proxy?

the guy being interviewed is Eric from nanex