Gyroscopic Investing

“Pretty much every maturity in the U.S. Treasury bond market has a yield that’s about at or above its 200-day moving average,” Gundlach said. “So it seems to me that something’s going on in the bond market and that’s why I turned negative on most assets during July and frankly that’s been the right position to be in ever since then.”

“I think fiscal stimulus is coming, and it’s fundamentally bond unfriendly,” Gundlach said. “This idea that interest rates are going to stay at zero forever became popular in July, and I know from my years of experience in this business when you hear words like ‘forever’ or phrases like something ‘can never happen,’ like they were saying interest rates could never rise, it means it’s about to happen, and it’s already happening.”

Thinking that interest rates could stay at current levels for another five years is “horrifically wrong” in that interest rates have been “putting in a bottom for some time,” he said. “I think the bond market is saying that we are headed to a fiscal stimulus pivot.”

http://www.marketwatch.com/story/fiscal ... eid=YAHOOB

MangoMan wrote:

boglerdude wrote:How to profit from rising rates?

There are plenty of inverse treasury bond funds.

Several respected technicians have shown that trend following doesn't work predictably with treasury bonds, however.

InsuranceGuy wrote:I'd be interested as well. My trend-following has me 50% in TLT at this point. We'll see what happens over the next few months but if something doesn't change I will likely be in TLT/GLD and out of stocks completely.

InsuranceGuy wrote:I'd have to disagree about the 50% correct and even so the 50% (or more) that it is right the trend continues for a considerable amount of time, so it is not just a % correct discussion but also the duration of the correct predictions.