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Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
SEVEN LEAN YEARS? DONE IN SEVEN MINUTES
Published: 04-30-2015In Genesis (41:27), Joseph interprets Pharaoh’s dream of 7 fat cows followed by 7 lean (and apparently, ugly) cows, as foretelling the coming feast and then famine, enabling Egypt to prepare for the coming 7 lean years by stockpiling reserves.
Yesterday, the 10-year German bund leaped 12 basis points (see Graph below), along with a surging euro following the weak US GDP report. Now, 12 basis points is a big move, but we’ve seen bond yields move by that magnitude before. What is different about this time is that there is no yield to begin with, so yesterday’s move in the bund wiped out 7 years (!) of income.
If investing at near-zero yields for 10 years is rational, it will prove to be the worst decade for investors since the bubonic plague swept across Europe in the mid-14th century (ok, I made that up; but it could be right). But I’ll bet that it is not actually a rational investment, and monetary policy is distorting all kinds of prices and investment decisions.
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Non-Zero Sum 02-17-2017
There are prominent voices (and tweets) urging us to pull back, dig in, and lock the gate. This rising chorus of ...
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Kids! 10-23-2014
On a totally non-market subject, more young adults are living with their parents, and here's the graph to prove it ...
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Negative Yields 03-19-2015
One of the (many) perplexing phenomena facing investors is the persistent (and falling) low yields on government ...
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