Here are a crapload of charts


“Most important” is self-proclaimed, but some of these are actually pretty interesting.

I know a bit about fixed income, but I am an equity guy. Somebody please explain chart 15…that looks like a ridiculous return. Is cherry picking long duration (25 year) zero coupon bonds in 1981 the equivalent of cherry picking AAPL on the IPO?

Yes, it’s exactly like cherry picking AAPL on the IPO. 1981 represents the alltime high in treasury yields because that was the tail end of an era of massive inflation / stagflation / super high interest rates, whatever you wish to call it. Mortgages back then had interest rates as high as 20 some percent. What followed was a massive narrowing of treasury yields for 3 decades. Furthermore, they chose a ZERO COUPON 25 YEAR TREASURY BOND which is the absolute most sensitive bond to the change in rates.

Here’s a chart of 10 year treasury yields I borrow / stole off of

Pollock 4.4.12

Thanks Swan, then I must say that this Gary Shilling is a shill and a sheister…and not a very subtle one.

He clearly wrote his bio himself on wikipedia, saying, “Shilling has an imposing record as a financial soothsayer.” Then going on and on about his revisionist history calls. What a deusch nozzle.

Yeah, with charts it looks like it was obvious in 1981 that you would make a killing in bonds. What they miss is that the top was driven by a bunch of fears that did not go away overnight. Even when rates did start to go down, there was always the fear that this was a head fake and they’d go back up again, If the future were really so clear, rates would have plummeted quickly.

Did you ever read his book ‘the age of deleveraging’. He devotes every chapter to his “great calls”. Apparently he called every recession during the last 50 years.


It’s not exactly cherry-picking…this example is pretty frequently cited as a warning to not constantly extrapolate recent history into the future…“interest rates have always risen…so they always will”…the idea is to look for inflection points for when economic fundamentals change…

contrarian investing

It’s still cherry picking the data no matter what point you’re trying to prove. And saying you should target inflection points is like saying you should try to make a profit in business, or win sports games by scoring points. Arguing that inflection points occur contemporaneously with shifts in fundamentals is blindly misunderstanding how long irrationalities can persist irrationally.