The Julian Robertson interview on CNBC reminded me of how much I wanted to be short the bonds but with so much government intervention, I have been shying away except in the core portfolio. I'm not convinced that rates have hit a low point and a big move down in stocks is likely to push rates lower as the fear factor enters into the market. But the risk that China stops buying our bonds is a real fear. And, once the Federal Reserve stops propping up bond prices, who knows what might happen.
I have been out of TBT in my personal account until just now however in the core portfolio, established at the beginning of the year, our TBT position is up more than 21%!
TBT is the ultra short 20 year + bond position. For every 1% bonds move down, this instrument moves up 2%.