Everybody is talking about the debasement trade, but long dated bonds are creeping up towards the 5% mark.
I saw 40 year Japanese bonds also reached 4% yields…
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I hope I don’t regret this but bought some TLT and TIP just now. 
Yes, I think it’s crazy.
You’re taxed on the interest payments. The USD debases against the CHF (at least that’s what seems to be priced in looking at the interest rate difference).
If the yields go up further the existing bonds drop in value (which only doesn’t matter if you hold them to maturity). The US is at 124% debt to gdp. People call it risk-free - I’m not so sure.
Of course if the yields drop your bonds go up in value. That could happen, who knows.
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I think that’s the key. I never liked bond ETFs personally, hence I don’t hold any. Buying bond ETFs seems to me to have the (aspect, not range of) volatility of stocks without the return.
To me the only way bonds make sense is to buy an actual bond or treasury notes (of whichever country/currency has decent return - Greece had 3%/year a couple of years back, now it’s down to 0.5% or so) and hold it to maturity.
I like your contrarian approach, but I don’t think it is an asset that you should apply it to. I would rather look at things that have been in disregard for some years, not after a day-long shit storm. I wouldn’t say that US treasuries were out of favor recently.
Personally I am impressed by gold’s recent development and think about buying some in 5-10 years, when our stocks stash would grow and ideally be on an autopilot to our target number by the target date. I would like to buy gold when everybody says that it is antiquated and not a productive asset, and Indian agrotech stocks is the place to be.
For you I can propose to buy more tobacco stocks.
You are contrarian to Danish pension fund to divest its US Treasuries
I’m curious, what’s your thesis?
I guess contrarian covers it all?
The move from Denmark could well be emotional/on principle. I found it perpetually funny that Norway’s pension fund doesn’t invest in non-ESG companies with their oil krone. Oh yeah, they can argue that they can promote a green agendahahahaha.
Well. A while back I’d sold off all US long bonds and kept only T-bills so my bond portion of the portfolio is gone except for a slice of CAOS.
While I’d gone into gold with the risk to USD value, this has now partly played out and is also in the broader public thinking so TLT has already taken a hit.
For sure there can be a long way to go and long term, the only way is down for the USD.
Since CAOS got a bump due to Greenland, I took the opportunity to sell that and buy into TLT. For sure you can say this is early as there’s still massive issuance to be done this year to roll US debt. On top of that rising JCB bond yields might cause and outflow from UST to Japanese bonds, but 4-5% is not a bad yield.
I changed my mind. Sold TIP/TLT and bought PAAS and WPM instead and got an immediate 6% gain on PAAS. 
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Glad to hear it. 
The small Danish pension fund dropping treasuries ($100m) appears to have been the canary in the coal mine.
Here’s what’s next and I wonder if there’s more of this happening that we’re not hearing about:
"ABP, the Netherlands largest pension fund, has reduced its exposure to U.S. Treasuries by 40%. In just six months, ABP cut its holdings of U.S. government debt from $30 billion to $18.5 billion.
The reduction went largely unnoticed for a long time, but is striking given the size of ABP and the geopolitical tensions between the U.S. and Europe. At the end of 2024, U.S. government bonds were still the fund’s largest investment.
They have now been replaced by European government bonds—particularly German ones, as that position increased by €10 billion to a total of €28.7 billion.
According to ABP, multiple factors play a role in the choice of government bonds, including maturities, currency risks, and alignment with long-term liabilities. In the run-up to the new pension law, European government bonds are also more suitable as collateral for hedging interest rate risks."
Still, not a extremely large impact given the total $$$ of treasuries out there, but a little momentum can turn into a lot of momentum over time, e.g. if they also step away from buying new bonds (I can’t imagine them quickly switching back).
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This is not because of the green agenda. They avoid oil due to concentration risk, and they try to diversicate. If all your money is from oil, would be very stupid to put your profit into oil stocks.
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This is also part of the mandate of the fund to invest in alignement with net zero goals and corporate governance best practices (which is decided by ministry of finance with oversight from parliament, so they do have a mandate from the Norwegian citizens).
This is in addition to the blanket ban on oil investment (but also investment in Norwegian companies, etc for the reasons you point out)
The responsible management activities of the Bank shall be based on the
long-term goal that the companies in the investment portfolio organise their
activities in such a way as to make these compatible with global net zero
emission in accordance with the Paris Agreement.
The Bank shall establish principles for the measurement and management of climate risk. The measurements shall seek to capture all relevant climate risk associated with the financial instruments used. The risk shall be estimated by several different methods. Stress tests shall be conducted on the basis of future development scenarios, including a scenario that is consistent with global warming of 1.5°C.
I listed to Pimco’s Manny Roman on the Oddlots podcast last night and was glad to see that someone else didn’t think it was crazy to buy USTs:
We talked about the S&P. The S&P is very expensive. Investors are going to look at long term fixed income and say, I can make 6 or 7% or holding a basket of fixed income that looks really attractive. And so I think every time you build back up, you see money coming back.
The flows have been incredibly good over the past 12 months. People have come and bought U.S. asset and and the trend is very is very clear. Nothing is changing.
And we have people basically saying I can get equity like return using fixed income. And for as long as that remains the case, I think the rates have very bounded in terms of where they’re going to go.
I don’t see much benefit in terms of returns. On contrary most likely post tax returns would be lower than Swiss bonds
It could make sense from diversification perspective (credit risk diversification by not only investing in Swiss assets). If that’s your rationale, then it might make sense.