Tuesday, August 30, 2011

The Perils of Fighting the Trend

Pimco's Gross Has 'Lost Sleep' Over Bad Bets .

Longer term Bill Gross will probably be right, Treasury yields are extremely low and you are not really getting compensated for the risk or inflation. In a rational world 3.5% 30 yr Treasury bonds do not make sense but in the shorter and intermediate term the technicals can eclipse the fundamentals. The Wall Street graveyard is littered with traders and money managers who tried to go against the trend. Remember the famous quote by John Maynard Keynes----"The markets can remain irrational longer than you can remain insolvent"

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