Replies to post #161715 on Biotech Values

[DewDiligence]

...rates could almost triple from today's rate to get back to the rates that existed when you posted that August 2010, “The Great American Bond Bubble”…

Translation: If there was a Bond Bubble three years ago, there’s a Bigger Bond Bubble now.

[linhdtu]

3 yrs ago TBonds yield were a tad above 4.5%. It went all the way down to 2.5% around Apr-Jul last yr.

The cap gain would have been approximately (4.5-2.5)x30 (it's a tad below that). Anyone believing in bond bubble would have missed out a lot.

Anyone can believe anything their heart so desires. At the end of the day, the total in their brokerage,whether it has gone up or down or nowhere, is all that matters imo.

http://finance.yahoo.com/echarts?s=^TYX+Interactive#symbol=^tyx;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

[zipjet]

It's funny that rates* could almost triple* from today's rate to get back to the rates that existed when you posted that August 2010

BUT will they?

Rates plunged in the 1980-90's in Japan and have not recovered:

http://www.gecodia.com/Japan-Government-10Y-Yields_a1305.html

The most pervasive error being made by financial types is the proposition that interest rates will return to "normal" levels in months to a couple of years at most. And they have been saying this for years.

Ultimately, rates will be a function of economic growth.


ij


*Not sure which "rates" you are referring to. 10 yr T's are only 30 bps lower than they were in August 2010.