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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures
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To: fswep who wrote (361)12/1/2000 7:14:25 PM
From: booters  Read Replies (2) of 12410
 
Perhaps he just sells the short term, I don't think he is going to share everything.

In practice he may sell the long term for the better gain assuming that if the market is up the shorts have been invested closer to the current yield anyway. BUT...he maybe selling the portion of his curve that is in the lowest return where ever that maybe in the portfolio, It would reap the best ratio return I guess, and leave the other ends intact. This could make the re-invest a little easier but I still think it crushes the basis for the plan to begin with.

Then again he may have some play on yield curve inverts depending on how he put the program together to begin with. HA!...this sounds interesting.

You need to get him to open up. Stay awake and night and think of questions that when the answers are put together will reveal his secret...HEHE. We all want to know. If there is way to fold market trading into a bond roll over plan without screwing it up we will all be rich soon.

It has been a while since I was in all that so maybe somebody has figured it out.

As far as the junk bond problem goes. Hmmmmm, only on a very basic level. If the default rate rises, the interest rate increases so the bonds you hold that are defaulting at an increasing rate go down in value while your flat rate of return deteriorates due to loss revenue. Gee..sounds like your screwed...hehe.

To answer your question, no I really know nothing about it. I just trade index futures now and don't consider myself a market follower anymore.

(call me when you learn his secret)

boots
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