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EScroogeJr (< 20)

What mystifyes me is

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2

May 07, 2008 – Comments (7)

where the government finds enough suckers who want a 30-year note that yields 4.66%. There was never a year since 1960s when the real inflation (including asset inflation) was lower than 4.66%. For 1 year or 2 years, I'd still understand it, you'll lose 3-5% of the principal, but other than that, you'll be safe. But try losing 3% to inflation tor 30 years in a row, and what do you end up with? If you're a long-term bond investor, you may as well donate your life savings to the Treasury in order not to prolong the financial agony.

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"By EMILY BARRETT
May 7, 2008 10:00 a.m.

The 10-year note fell, taking other Treasury maturities lower as well, as market participants looked to build a discount into the forthcoming auction.

The two-year note was recently down 1/32, or 31 cents per $1,000 invested, at 99 16/32 yielding 2.39%, and the 10-year was 8/32 lower at 96 19/32 for 3.92%. The five-year was down 5/32 at 99 24/32 for a 3.18% yield, and the 30-year was 6/32 lower at 95 16/32 yielding 4.66%.

"

(Thanks, imobillc) 

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=51460&t=02009475734254864395 

 

7 Comments – Post Your Own

#1) On May 07, 2008 at 3:09 PM, madcowmonkey (< 20) wrote:

mystifyes? Is that even a word? 

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#2) On May 07, 2008 at 3:25 PM, EScroogeJr (< 20) wrote:

sorry, my spelling is terrible, I know.

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#3) On May 08, 2008 at 11:29 AM, madcowmonkey (< 20) wrote:

No problem, it was just an interesting word you decided to use in the title.

To answer your question: I think everybody has their own reasoning on why they would buy the 30 year note. The only logical thing I can think of (not my strategy) is that they feel inflation will not exist any longer and 4% looks good when they have been losing 10% in their portfolio:) 

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#4) On May 08, 2008 at 2:26 PM, madcowmonkey (< 20) wrote:

Now when I post a comment the window goes away. It sucks when you have many stupid opinions.

Oh yeah, I am talking about the view more link for blogs. There is that stupid marvel add again.

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#5) On May 08, 2008 at 2:26 PM, madcowmonkey (< 20) wrote:

No wait, now it Berkshire.

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#6) On May 08, 2008 at 2:27 PM, madcowmonkey (< 20) wrote:

back to marvel

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#7) On May 08, 2008 at 2:27 PM, madcowmonkey (< 20) wrote:

still marvel? What happened to berkshire?

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