Is the Biggest Bubble of them all Unbreakable?
As Chris and Rick have especially been saying for months, those predicting doom for U.S. Treasuries could not have been more wrong. Uncle Sam’s I.O.U.’s may indeed one day be little better than toilet paper; but for now, they are about the only reliable asset class giving you a strong, double-digit total return.
As promised, here is a commentary that Chris wrote nearly a year ago. While NON-Treasury bonds indeed are very shaky, the bond market vigilantes have been rendered extinct when it comes to sovereign debt.
Make sure you add some Jack Daniels or something to that pop!
Or some Noah’s Mill or Rowan’s Creek — no pop needed. Maybe a little ice…..
Excelsior:
Noah’s Mill? Rowan’s Creek? I assume that you are a whiskey drinker.
Yes sir. Whiskey, Bourbon, Craft Beer, Red Wine, Rum, some Tequila (I know you’re not a fan), and Moonshine.
If you haven’t had Noah’s Mill or Rowans Creek, they are both great, a reasonable budget, and fairly accessible.
This is re-post with some other good suggestions:
On December 29, 2015 at 7:45 pm,
Excelsior says:
I do enjoy Whiskey, Irish Whiskey, Bourbon, and Scotch……..
I’m bullish on:
Noah’s Mill, Jefferson’s Small Batch, Rowan’s Creek, Blanton’s Single Barrel 93, High West Campfire, High West 16 year Rocky Mountain Rye, Angel’s Envy 86, Bowan’s Brothers Small Batch, Eagles Rare 17, James E Pepper 1776 15 year Rye and 15 year Bourbon, Woodford Double Oak, Willett Pot Still Reserve, Four Roses Small Batch, Makers Mark 46, Bulleit Rye and Bulleit Bourbon 10 year, Resevoir Rye, Hudson River Manhattan Rye, Bushmills 21, Bushmills Black Bush, Red Breast, Michael Collins, GlenLivet Nadurra 16 Year, GlenLivet 15 year, Glenfiddich 18 year, Glenmorangie LaSanta Sherry Wood, Glenmorangie Quinta Ruban Port Wood, Macallan 18 year, Johnnie Walker Blue, Laphroaig Quarter Cask, and Kavalan.
These trade in a range for me but I’m constructive on:
Knob Creek, Makers Mark, High West American Prairie, High West Bourye, Woodford Reserve, Old Forester 1870, Old Pogue, Buffalo Trace, Ezra Brooks Single Barrel, Ridgemont Reserve, Four Roses Single Barrel, Elijah Craig 12 year, Gentleman Jack, Jameson, Wellers Special Reserve, Leviathan, Chivas 12, GlenLivet 18 year and 12 year, Glenfiddich 15 year, and Glenmorangie The Original.
I am currently bearish on:
Old Crow, Old Forester, Old Grandad, Fighting Cock, Lexington, Jim Beam, Canadian Club, Wisers, and Cutty Sark.
Because I love money so much and want more, I will help Obama (by lending him money) build a slave state that will take even more from my Christian brothers.
Chris I do believe I’ll trust god, gold and silver instead. Governments and paper come and go.
Can’t argue with that long-term; but the present reality (and for some time now) has been that long term Treasuries–esp. zero coupon/leveraged ones–have at the same time been about the safest and best-performing asset classes.
Agreed Mr. T. I’ve been on board with both your comments and Ricks comments on the stability of bonds the last few years as a place people could have parked their money. I concur that gold is better on the long haul, but people seem to miss the point that over the last few years treasuries were a better place to park money than Gold. Only now is it looking like that ratio may turn over into Gold’s favor, but I don’t like putting all my eggs in one basket, and like to diversify amongst different asset classes to minimize some of the risk.
For many on here, their longer term hatred of paper assets, had them miss out on a safe place to park some of their money the last few years in the longer term treasuries. Even recently, with the stocks markets correcting down, the longer term treasuries have done very well and gave people a refuge in addition to the Yen and Gold.
People seem to mix up dealing with present day reality and reviewing the best practices over the last few years, with their desires to project out or backwards for 10-30 years. Apples and oranges in my opinion.
I will add that I think the Bond Bubble is getting long in the tooth, and when it pops it may cause a reorganization of the whole financial system. It is a giant market.
My only point the last few years was that long term treasuries have been a good place to turn to keep one’s powder dry in market instability, versus throwing cash into a savings account or money market that is not paying any real yield. Gold didn’t do so hot in 2013, 2014, or 2015 in comparison.
The Bond Market’s days are numbered…..but there is still time before it’s final demise, and when stocks are tanking, TLT has done alright in my opinion.
Here is the last 7 months since the initial August rout to the general stock markets, which finally scared the crap out of investors. When people finally did freak out, then all 3 safe havens (Gold, Yen, Long Term Treasuries) did their job……even when the king dollar didn’t hold it’s own as a safe haven.
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=7&dy=0&id=p17703427379
Gold stocks rocket as investors seek Safe Haven
Gold is back in a bull market, up over 20% from December low
Frik Els | about 6 hours ago
http://www.mining.com/gold-stocks-rocket-as-investors-seek-safe-haven/
Great comments, Excelsior — that’s why it’s so important to NOT be too passionate/religious when investing. Like I said in today’s wrap, it’s part-humorous and part-sad that the most religious gold bugs, who rode entire portfolios down 90% because gold and miners were the only place to be, now think they’re geniuses now that they’re back to down 80%.
I agree. I’m not a long term holder of Gold or the mining stocks, and have traded counter-trend rallies in the miners, but then got out and shorted miners or the metals back down. I also only allocate a small portion of my trading account to Mining. I’ll probably scale that portion up a little more if we really have rounded the corner.
I have other big portions of my trading accounts dedicated to Uranium stocks, or Agricultural & Fertilizer stock, or Lithium, or Renewable energy, or Currencies, or ETFs that track entire countries or emerging markets. As for indexes I typically trade both directions of the S&P or the Russell 2000, or I trade Volatility,=. Later this year I’ll get back around to Oil stocks and ETFs, and heck maybe towards year end I’ll even get back into the Base Metals and commodity conglomerates.
It’s a big investing world out there 🙂
Thanks for all your daily insights Chris.
You don’t put all your eggs into one basket? Where have I heard that before!
Funny. There was one famous investor that said to put all your eggs in one basket and guard that basket very carefully……. For me, I’m a big believer in diversification.
Diversification among different asset classes (stocks, bonds, currencies, commodities), different sectors (tech, healthcare, financial, resources), different sub -sectors (Gold, Silver, PGMS, Base Metals, Oil, Nat Gas, Uranium, Renewables, Lithium, Agricultural), and then within those sub-sectors different market cap stocks (Jr explorers, Jr producers or development-stage companies, Mid-tier producers, and even a few Major producers from time to time).
Maybe I should just throw it all on Black and close my eyes, but I like to spread the risk.
Diversification is the only truly sensible way to invests, but you know that Excelsior!
Well, there are some that just specialize in one very specific area, or throw everything into 1 index. There are acquaintances of mine that only bet on 1 stock at time with all their money in 1 lump sum. They win big or lose big. I’m a risk taker, but dang that is too risky for me.
On the other side of the fence, I know traders that do so many hedges and options bets on their main stock purchases, that they never make any progress and basically just tread water. I think people can go a little overboard on hedges and insurance, and that includes and over-allocation to Gold.
The big thing is what Mr. T. mentioned above:
“…..that’s why it’s so important to NOT be too passionate/religious when investing.”
I agree whole-heartedly.
Thanks for sharing this Chris.
Probably weekend reading…with a pop or two, given the week 🙂