Warren Buffet says bond market is dead (loans, interest, financial)

[EDS_]

Originally Posted by skeddy

Buffett's investing advice hasn't been relevant for 20 years.

He's made ~$100 billion buying Apple the last few years.

Buffett's blind spot toward most tech has been his biggest fault by far.

[mathjak107]

All that matters is how his shareholders did and if they simply bought an index fund instead of the Buffett mojo how would they have done ..

Certainly compared to great fund managers like will danoff ,they did not do to well buying in at at any point the last two decades

[BigCityDreamer]

Originally Posted by roadrat

Well is he right?

I haven't seen any reason to invest in bonds during the last 25 years.

So, bonds have been dead a long time.

[mathjak107]

I had no reason for 4 decades to own bonds .but today I have loads of reasons for specific types of bonds , being retired as well as having a maximum amount of dollars at this stage . Dollar wise even small perecentage moves can be years of income in dollars up or down so we gave a different strategy and goal now.

If anyone wonders what is changed and why bonds can play a role down the road I suggest you read Michael kitces article on The red zone .

https://www.kitces.com/blog/managing...ment-red-zone/

[EDS_]

Originally Posted by mathjak107

I had no reason for 4 decades to own bonds .but today I have loads of reasons for specific types of bonds , being retired as well as having a maximum amount of dollars at this stage . Dollar wise even small perecentage moves can be years of income in dollars up or down so we gave a different strategy and goal now.

If anyone wonders what is changed and why bonds can play a role down the road I suggest you read Michael kitces article on The red zone .

https://www.kitces.com/blog/managing...ment-red-zone/

That's a really excellent blog post that everyone should read. For me it leans too conservative over time but for most the ideas around tenting are worth strong consideration.

Thanks for posting the link.

[mathjak107]

How much you tent is up to you ....but remember ,the entire 30 year outcome in retirement is determined in the first 15 years .

You can have the best bull market in history in your time frame like those in 1965/1966 and it was to little to late ...so sequence risk is a bigger factor than returns are when spending down.

[ddm2k]

Originally Posted by roadrat

Well is he right?
https://www.cnbc.com/2021/03/01/buff...investors.html
And if so what's that mean for the stock market in general?

Msnbc has a paywall, so I've not read the article.

There was a time when bonds were ... alive? What kinds of returns were they generating?

[vision33r]

Buffett was buying transportation and retail stocks the last 2 decades. If he had invested in any tech during that window, his fortunates would've gone up by 1000x. He is right, that you should only invest in what you know. His time is over and time to turn the keys over. The only reason he's still doing great is that he buys any stock at a big discount compared to retail investors.

[lieqiang]

Originally Posted by ddm2k

There was a time when bonds were ... alive? What kinds of returns were they generating?

VBTLX's first ten years out of the gate:

[lchoro]

TLT rose and fell with stocks in 2019-2020. It wasn't until the Fed announced QE and the other emergency programs that the two rose. Buffett is making the point that the extreme low yield on long-term treasuries means that small changes in the yield can result in big swings in the price which can destroy actual returns from holding the bonds. It remains to be seen whether the Fed reacts to this recovery in yields which is still a long way from pre-pandemic levels.