Putting the pieces together...

Albert Edwards: Shilling on Steroids

Just to remind me that the real return of bonds has beat that of stocks for the past 20 years, Edwards, of Societe Generale, points out that if a recession were to recur due to FED raising rates, US Treasury long rates could drop from over 2% to zero or lower. That could give 100%+ gains. This what's happened to UK bonds (gilts) this year and to Japanese bonds too. 

Of course this is what has happened for long Treasurys and SP500 stocks for 20 years, and not what will necessarily happen in future. 

Here is a chart first published here in 2009 targeting a low for the PPI this year. There is increasing cycle, sentiment, economic, and technical evidence for bottoms in PPI, the stock earnings/price ratio and bond yields in this next month. We'll simply have to see, but I am gradually and modestly positioning in metals and stocks on bigger down days. More later.

Actually, I missed the fact that PIMCO's mutual fund PEDIX has out-performed Hoisington's and Vanguard's comparable zero coupon 20+ year TBond funds since all three have been simultaneously active.

I call this the Gary Shilling chart. Shilling has made his fortune being long the zero coupon 30 year Treasury bond since 1981. He has always seen the interest received as a secondary consideration. He mainly has preferred them for their appreciation.
EDV, Vanguard's 30 year zero coupon TBond ETF, and Hoisington's similar mutual fund WHOSX, are easy ways to ride this bull.

It has been a verrrrry good year to date: the best since 2009. Largely it's due to the golds and silvers and oils I was piling into last time here.
I did cut the metals stocks back almost 100% about two weeks ago, but am buying them back slowly on down days.
Sentiment is very dark and gloomy which is a good thing for asset prices.
I hope to have more time to post my analysis, perhaps even this weekend...
Cheers all!

Hmmmmmm.....