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Swenlin stumped by bond action :)

Bottom Line: The most important lesson learned from the bond rally is that it is best to follow mechanical timing models based upon price movement. At the end of August we were on a buy signal for bonds, which I regretted because it looked technically and fundamentally as if bonds were about to tank. We are still on that bond buy signal and happy that we let the timing models do our thinking for us.

To paraphrase Joe Granville from his 1960 book, “If it’s obvious to everyone, it’s obviously wrong.” Of course that doesn’t always apply, but the more obvious something is, the more nervous I get. Our conclusion about the imminent negative outcome of the global debt crisis is an example. Hoisington points out that Japan has been stalling the piper for 20 years. I don’t think we have that long, but I don’t know how long we do have.

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