Professor Elam

Friday March 26 2010

Bill Gross runs the largest bond funds on the planet at PIMCO. Yesterday he said the three decade bond party, lower yields, higher prices, had finally ended. PIMCO that has only offered bond funds is now offering stock funds, so investor sentiment is completely opposite what it was a year ago. 

Below stock prices shown by the SPX in black are headed up., Bond prices in red and black shown by the TLT fund, are dropping fast. This is the same scenario we got in 1987, at least until October when stocks crashed and bonds rallied, hmm, history repeats?  We have mentioned this numerous times and will continue to track it closely.