Bill Gross Treasury Dump

[Dorsia1]

I am not trying to be smart but I can't help wondering how Bill Gross is feeling today about his recent punting of all his long dated treasuries.

Very glad that 50% of my portfolio is FFH.

[link01]

well, the timing of those highly publicized sales had to hurt! but i can understand his decision. long dated treasuries have out performed the s&p500 over the last 10 years, despite the doubling of stocks from their march09 lows, AND they're at historically high price/low yield levels. they pay precious little for the risk that inflation might begin to uptick from these levels! i dont see how anyone could own them unless they had a strong over-riding conviction that the deflationary forces implicit in the debt-laden balance sheets of western industrialized nations as well as their citizens would eventually win out over pedal to the metal inflationary policies of govts. i own both ffh & mkl but i have to admit i've been more confortable with mkl, precisely because i couldnt help but hold my nose over this one element of their portfolio. the stock hedges, the high yielding munis back stopped by brk, even the CPI derivative bet with its known max capital at risk of loss-----i could understand those. but not long dated treasuries. shows how much i know!! still, its early innings, so we'll see.

 

here's what the 30 yr treasury yields which move inversly to the bond has done over the last 10 yrs. you gotta have CONVICTION to style yourself a value investor & buy these beasts:

 

http://finance.yahoo.com/echarts?s=%5ETYX+Interactive#symbol=%5ETYX;range=my