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Strategies & Market Trends : Value Investing
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To: Wizhi who wrote (58969)1/26/2017 8:50:29 AM
From: Micah Lance  Read Replies (1) of 78753
 
Very nice post.

IMO, number 3 should be a yes. Central banks have been buying assets (bonds) like crazy. Our federal reserve owns $2.46T in treasuries (based on the latest data) plus however many treasuries are owned by other central banks. This demand is causing bond prices to rise hence bond yields going lower, my argument is that in a normal environment we would see bond yields higher than where they are now.

As an example of the sovereign bond nuttiness, Spain's 10 year is trading at 1.5% yield which is lower than the US's 10 year yield of 2.5%. How can Spain be viewed as relatively stronger when they had no government leader for 6+ months and an unemployment rate of 20%+ is beyond me. It makes one wonder who is buying those bonds.

If it helps, I am in the same boat as you. I am finding this market a nice test in patience :)
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