Zeev's Turnips Patch-No Politics (ZEEV)

[lee kramer]

osprey: There's a chunk of money, how much I don't know, but I suspect it's a lot...that seeks the greatest yield with the greatest safety. This is probably old, Big money where preservation of capital is paramount and yield a close second. Years ago, late 79, early '80, it was T-notes and T-bonds where you could get 12-15% yields. I know people who bot some of these. I suspect too that many sharp funds did the same. At 15% in a T-note or bond capital DOUBLES in less than 5 years without touching the principal. Add to that the gains when rates eventually decline and the bonds move up in price, it turns our rather well. We are far from that now. But if rates rise, and I suspect they eventually will, the attraction of high(er) yields will siphon some capital from equities, the only game in town with yields at 50 year lows. One note; back then when these 12-15% yield were there for the taking, I didn't sense any rush to grab 'em...just the few who took the attitude that if the US Gov't. didn't make good on it's debt obligations, nothing much else would matter. I think we often see that attitude at tops and bottoms of most markets.