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Why in the world would you own bonds?

bridgewater.com

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Re: Why in the world would you own bonds?

#281

Post by dash2 »

JohnJamesRambo wrote: post #168
rawtxapp wrote: post #49

Earlier quoted context omitted.

This was the part that caught my attention as well, it would be super interesting to see it play in real-time. For one, how would they even put capital movements controls on crypto? For example, I just have to remember my 12 word seed and I can hop on a plane to another country and my crypto comes with me. The other part is, wouldn't those capital controls be the last nail in the coffin of "we lost complete control o…

The minute they try to impose those controls on crypto is the ultimate Streisand Effect moment that will confirm to everyone that they definitely need this asset. I suspect this is why they have avoided it so far.

The Indian government is going to ban it entirely. I'm unconvinced that many Indian investors will want to hold on to an asset which can land them in jail.

Re: Why in the world would you own bonds?

#283

Post by eloff »

ping_pong wrote: post #122

People like Ray Dalio keep saying this, and scores of others have been talking about how fiat currency will fail, but it won't. Globally, no one that matters wants it to fail, therefore it won't. People like Paul Tudor Jones have been saying that the USD will fail for decades and people should buy gold. Even Peter Schiff has been talking about gold and hyperinflation since before the Great Recssion. All the bears hav…

He's not saying it's going to fail, whatever that means. He's saying it's going to lose value. Not only can that happen, but historically it happens with 100% probability. We can only argue about how much and how quickly.

At some point the US will lose reserve currency status. It's happened to every reserve currency before the USD and will happen again with probability of 1. The question is only how soon.

Re: Why in the world would you own bonds?

#284

Post by MegaButts »

WJW wrote: post #232
cosmodisk wrote: post #206

Earlier quoted context omitted.

You don't become a CEO of a large bank by being the smartest,this title usually belongs to the ones a few steps below.

Perhaps a few quants in the bank have higher IQ, but you don't make it to CEO of a large bank by being stupid. A carefully cultivated image of being "not the smartest bulb" can be a powerful advantage. Making dumb mistakes when it doesn't matter can make people underestimate you at more crucial moments.

It's generally agreed upon that the CEO of Bank of America during the 2008 financial crisis is an idiot.

Re: Why in the world would you own bonds?

#285

Post by floor2 »

pmastela wrote: post #64
nlh wrote: post #24

One thing I've learned about professional investors is that no matter what, at the end of the day they're talking their book. So whether you buy these arguments or not, Ray Dalio is simply promoting a position that Bridgewater no doubt has taken. So when he says: "I believe a well-diversified portfolio of non-debt and non-dollar assets along with a short cash position is preferable to a traditional stock/bond mix tha…

I don’t know a whole lot about professional investing, but if watching The Big Short has taught me anything it’s that the pros will say one thing publicly but do the opposite in private until it’s to their advantage to do a 180 and make their private stance actually public. Recently this was Jamie Dimon lambasting Bitcoin all the while a cryptocurrency trading desk was being set up at Chase. The following exchange fr…

It's great that you recognize professional investing isn't something you know a lot about.

It's a bit concerning that people believe a hollywood movie has taught them how the industry works. Keep in mind how hollywood portrays "hackers" or "scientists" or "Russians" or whatever group is an outsider or opposition to the protagonist and realize they're doing the same to finance.

Re: Why in the world would you own bonds?

#286

Post by Ekaros »

thoughtstheseus wrote: post #75
paulmd wrote: post #47

Earlier quoted context omitted.

At a macro scale, holding cash isn't free either. If it's in a bank account then welp, $250k FDIC limit. If it's physical then welp, gotta rent and secure a warehouse that is literally chock full of cash for anyone to steal. Etc etc. Zero/negative interest rates are supposed to encourage productive activity, or at least spending.

Cash is making money if your alternative is a negative yielding asset.

Only if acquiring, storing and handling cash is cheaper and less risky. Which when we start talking about large sums of money might not be the case anymore. As it does get quite complicated.

Re: Why in the world would you own bonds?

#287

Post by nealdotpy »

DebtDeflation wrote: post #276

We seem to have an entire generation of people who think "stonks can only go up". Similar views were expressed about houses/real estate in 2007. At 47, I'm probably substantially older than the average HN poster, but having lived through the 2001 dotcom implosion and the 2008 financial crisis has given me some perspective. I'm getting some really bad vibes about the sustainability of the the economy and asset markets…

I'm definitely far younger than you; however, I agree. The problem is that there's no timing it. So positioning yourself such that you leverage other factors to make money in a market (e.g. delta-neutral positions that are long/short time/volatility) are all you can do if you want to play the game without having high directional risk.

Re: Why in the world would you own bonds?

#288

Post by brenner100 »

"If history and logic are to be a guide, policy makers who are short of money will raise taxes and won’t like these capital movements out of debt assets and into other storehold of wealth assets and other tax domains so they could very well impose prohibitions against capital movements to other assets (e.g., gold, Bitcoin, etc.)"

Re: Why in the world would you own bonds?

#289

Post by gohurnd »

shostack wrote: post #130
ac29 wrote: post #31

Earlier quoted context omitted.

The book he has coming out this year The Changing World Order: Why Nations Succeed and Fail certainly seems to touch on some similar themes from the brief description I found online.

Yes, it seems he's betting against the Western financial growth and stability. I wonder if he thinks the days of the dollar's reserve currency status are numbered.

It is way too early to get out of dollars. When the dollar inevitably spikes, these emerging market funds are all going to suffer. If you were to sit on cash and wait to buy emerging markets at a discount, you’d do better over 20 years than buying now.

Re: Why in the world would you own bonds?

#290

Post by thebean11 »

missedthecue wrote: post #211
rawtxapp wrote: post #49

Earlier quoted context omitted.

This was the part that caught my attention as well, it would be super interesting to see it play in real-time. For one, how would they even put capital movements controls on crypto? For example, I just have to remember my 12 word seed and I can hop on a plane to another country and my crypto comes with me. The other part is, wouldn't those capital controls be the last nail in the coffin of "we lost complete control o…

Bitcoin is only useful if you can turn it into fiat relatively easily. Government can very easily control almost all of those channels.

Presumably you'd be going into a country that is not attempting to control those channels though
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