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John P. Hussman
Heard on CNBC: "I'm getting a succulent yield close to 3% on the S&P - that's way better than owning the 10-year as far as I can see." Two problems: a) the yield on the S&P 500 is just 1.98%, and b) that kind of carry-trade mentality rules out the possibility of any capital loss.
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user_error 6 Jun 19
Replying to @hussmanjp
To be frank, John, it's ruling out an awful lot of capital loss on the as well. Not saying it WILL happen, and TLT is a good place to be in a slowing economy, but any whiff of real inflation over the next year or two and the yield can snap back to 3.5% in a hurry.
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John P. Hussman 6 Jun 19
Replying to @pianomikey1
The difference is that the yield on bonds is a yield to maturity. So 10 years out, if you hold to maturity, you know that absent a default, the yield you lock in when you buy the thing is the total return you'll actually obtain, regardless of where rates go in the interim.
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Rick W. 6 Jun 19
Replying to @hussmanjp
You could have saved some explanation by just noting it was O'Leary.
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John P. Hussman 6 Jun 19
Replying to @Conshy400
You're not wrong - I just try to criticize ideas rather than people unless I think they're intellectually dishonest or nefarious.
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Will 6 Jun 19
I tweeted immediately with the same question... No response yet
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StockMarketCaddie 6 Jun 19
Replying to @hussmanjp
Do you really think the S&P can go down?
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WC Varones 6 Jun 19
Replying to @hussmanjp
What is a succulent yield?
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Decoy 6 Jun 19
Replying to @hussmanjp
Wow can’t believe you watch CNBC!!! You must own Tesla and the Fangs
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MindBody School 6 Jun 19
Replying to @hussmanjp
Not to mention, you can now get 2%+ just sitting in cash with the right bank/ brokerage account.
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SkepticalInvestor 🙊 6 Jun 19
Replying to @hussmanjp
What’s a capital loss? Chairman Powell will not let that happen.
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