Back in 1981 the U.S. Treasury long bond yielded more than 15% while the Dow's yield was around 6%. I used to amuse my friends by telling them that sometime after the year 2000, once the long term interest rate cycle bottomed, that the long bond would yield less than the Dow.
Today the long bond is yielding less than 3.70% while the Dow's yield is above the 4.25% level. I never expected being right would be so painful!
10 comments:
Did you see Louise Yamada on Fast Money? 600 then 400. This woman has been right about this decline. The only things she got wrong were gold and the dollar. Sh*t. This is scarey.
dennis, why do you say she was wrong on gold and the dollar?
Hi Carl,
I'm a buyer tomorrow at any time the SP's get down to 732.50, that should be the bottom (give or take a few ticks).
Thanks.
Kindest regards,
PM
she also called for a recovery in may pointing at the jan and march low as a bottom
Yamada had predicted a much higher price for gold and a much lower price for the dollar. She has reiterated her stance on the dollar even after the current rally, which she did NOT see coming and she maintains that the dollar will weaken materially in the future. So far, she has been wrong on both gold and the dollar.
Further on Yamada. She predicted the decline on the DOW would stop at 10,300. She was wrong. On the Bloomberg interview that I mentioned yesterday, she declined to predict a price at which the SP would end its decline. So, she's not perfect. The really scarey chart she showed tonight on Fast Money was a long-term double top on the DOW.
http://safehaven.com/article-1693.htm
Hi carl wondered what your views are on this 3 peaks and domed house article
Peter Bernstein published an article about the stock and bond yield history recently which I wrote about at my blog.
http://tinyurl.com/6zhwtt
http://twocents.blogs.com/weblog/2008/11/peter-bernstein-one-of-the-most-senior-investment-advisors-currently-in-practice-and-the-author-of-many-excellent-investmen.html
For some positive news. Dr Doom (Marc Faber)says we have a big move coming to the upside. Better for technicians, check out Bill McClaren on CNBC Europe. He is quite good. Google "Bill McClaren CNBC Europe" and the video will show up.
Don't worry. The Dow companies will cut their dividends soon, and the Dow yield will once again fall below the bond yield
Post a Comment