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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14782  
Subject: Re: Hotel California Date: 12/27/2012 10:47 AM
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Treasuries at current yields is almost
identical to that of writing naked index puts 25% out of the money.*
...
Adding a little "cheer" to the season?????? ;-)


Well, it's a cheery observation if you're among those smart enough not to own Treasuries!

Note, I actually expect yields to stay quite low, and often lower than this,
for most of the next several years as deflationary pressures remain dominant.
But I would never bet money on that. The upside is nonexistent, and
the risk of a bond panic is ever-present.
If you want to park money in something cash-like, use cash.
Nothing besides cash (including very short dated notes) is like cash.

Don't reach for yield in fixed income, live with the zero on offer for now.
Nothing worse than an asset that's "good until reached for".
And it bears repeating, "More money has been lost reaching for yield than ad the point of a gun."
(Raymond DeVoe, Jr.)

Almost nothing but equities and cash make sense these days, and I'd hold my cash in a variety of credible currencies.
The number of bonds and preferreds that have yields commensurate with their risk is pretty low.

Jim
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