Stocks and Trading Thread - Channeling your inner Mono

[MadImmortalMan]

The ten-year hit an all-time (ever) low yield today. I can certainly follow the reasoning here.

[Admiral Yi]

Seriously, if you have a better idea how to play this, let me know.

My point is shorts are great but expensive to maintain for any kind of time.

[alfred russel]

Seriously, if you have a better idea how to play this, let me know.

My point is shorts are great but expensive to maintain for any kind of time.

The two reasons they are expensive:

1) You have to pay dividends. Here they are very low, and if they go up, that means major winnings.
2) The interest to the brokerage, but this is avoidable if you keep you account sufficiently funded. This normally has opportunity costs, but right now rates are near zero. If that changes, see #1 (major winnings).

I think right now is the exception to that rule.

[Admiral Yi]

What's your break-even point?

[DGuller]

The ten-year hit an all-time (ever) low yield today. I can certainly follow the reasoning here.

The problem is that as interest rate decreases, bond's sensitivity to further decrease in the interest rate increases.  Japan used to have them at near zero, if that's where we're headed (and I sure hope it's not where we're headed).

[alfred russel]

What's your break-even point?

~4.5% per year.

[alfred russel]

The ten-year hit an all-time (ever) low yield today. I can certainly follow the reasoning here.

The problem is that as interest rate decreases, bond's sensitivity to further decrease in the interest rate increases.  Japan used to have them at near zero, if that's where we're headed (and I sure hope it's not where we're headed).

Japanese 30 year bond yields are about 1.7% right now. I know they used to be lower. So there is potential for further declines. However, our inflation rate was 3% last year, and the dollar has not been doing well against many non euro countries.

I think you need to remember our respective track records on this stuff, and how pre 2008 you were so wrong on the housing market and I was so right. You even made a thread about how I was right about everything. 

[DGuller]

 . To be fair, I really have no strong opinion, my ears glaze over whenever a subject of bond yields comes up.  I just offer comments as they come, without any greater opinion about things.  This isn't at all like the housing market subject, which I thought about for years, and had a pretty strong belief on.  It's also a lot easier to predict an inefficient market with lots of dumb money than something like a bond market.

[MadImmortalMan]

Facebook bombing. 

[Admiral Yi]

Below its initial price?

[derspiess]

Below its initial price?

Down from its initial price, but still above the IPO price.  I wouldn't necessarily call that "bombing", but I'm no stock guru.

[CountDeMoney]

Facebook bombing. 

Really?  It opened at $42.99, up from its initial $38.  How is that bombing?

Zuckerburg is now the 29th richest person in the world.  Over 1,000 Facebook employees became millionaires today.

Wouldn't call that bombing.

[CountDeMoney]

LOL, Bono just became the wealthiest musician in the world today, thanks to FB.

[PJL]

Been trying to short FB, but apparently it's not allowed. So much for free markets eh...

[derspiess]

FB is currently at $40.32, up 6.45% from the IPO price.