The Convexity Maven

Some investors buy long maturity (high Duration) bonds to lock in a desired yield and reduce the uncertainty of re-investment risk. But most financial managers use Duration to build a balanced portfolio where a thoughtful combination of equities and bonds tends to reduce the volatility of the entire investment portfolio. This commentary digs into how to use my new NYSE-listed Bond Bull "strategy" for Capital Efficiency. Read here: https://bit.ly/41pOELS

Come this time every year, I publish a list of “Investments” that I think will do well over the intermediate horizon – two to five years. Read the article here: https://bit.ly/4fuSwPh

I have been relentlessly trash-talking those I refer to as “Team Transitory”. But what if I am wrong? What if the market was right only a few months ago when it expected a Fed Funds rate of 2.78% by the end of next year; and this rate back up is purely an ill-considered reaction to a political surprise? Today, I introduce a new Strategy to profit from lower rates. Read full article: https://bit.ly/4fgU7YJ

People tend to think they are "special", and that events that occur during their life time is the "most consequential" in human history....such as the upcoming election. While I generally say "It's never different this time", as gleaned from the Options market, this time it may be closer to the truth. Read more: https://bit.ly/3AgBypa

All eyes have been on the FED and what they plan to do tomorrow; will it be 25bp or 50bp? Today we examine the contradiction of a Yield Curve that is still so inverted that even a "hard landing" would fail to satisfy. Read full article: https://bit.ly/4gprLgT

"You can lead a horse to water but can’t make it drink.” Today we consider why Mortgage-back Securities (MBS) are still trading nearly two standard deviations wider (higher in yield) than their historic average, nearly two years after the Federal Reserve Bank [FED] started its tightening cycle. Read full article: https://bit.ly/3L6XkgX

While never totally transparent, the medium-term path forward is well lit. Via a combination of Politics, the Data, the Calendar, and Hubris (human ego) the FED is boxed in, and the most likely scenario is “one and done” until the election. Read the full article: https://bit.ly/443gE7m

Michael Lewis’s first book, “Liar’s Poker” (1989), was ostensibly about the 1980’s bond market powerhouse Salomon Brothers and their mortgage-backed securities (MBS) business he dubbed “the fat men and their marvelous money machine”. Today I pull back the curtain on how this process has not changed, and how it still creates huge opportunities for profit. Read full article: https://bit.ly/49Dzi84