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Now that you mention it, I haven't seen that metric for bonds either. What would one use for the index? I presume the 10-yr Treasury would be good. But I suspect that some more normal bond index would be used.


That is the wonderful thing about developing your own investing tools. You're the one who gets to makes the choices, and you're the one who understands its limitations. Markets are not efficient, but they do tend toward efficiency with inexorable ferocity (sp?). If anyone sees that anyone else has an edge, they will borrow it shamelessly and run it into the ground. So a premium can be earned by those who do their own thinking and and who don't reveal their edge.

I have no idea what might be done with R2 (or similar) as it might be applied to bonds. But if the idea intrigues you, spend an afternoon or two poking around in data to see what you can come up with. Typically, the idea will go nowhere, but the process of developing and testing the idea will generate a spin-off that will produce pay dirt. That's the fun part of investing, exploring ideas. I do expect a return on the work I've done and the risks I accept. But often enough, just proof of concept is ample reward. A good idea is a precious thing. Treasure and protect it when you find one.


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