Curious what people opinions are of: SHY: TIPS: (Is it over priced or still a good entry point)?
Depends on what your time horizon is. Right now the 10 year TIPS breakeven is around 180 bps. So, if you think inflation over the next 10 years will be higher than 1.8% (annually) then TIPS are a better place to be than nominal Treasurys. We’re selling a a$$ load of TIPS right now. There could be better entry points over the next four months or so, but if you’re holding on to them for 3-6 years as most are recommending right now then it won’t matter that much. You should do fine.
It seems like the best deal now is to short the market and wait. Almost everything seems over-valued… Finding an undervalued play is getting hard…
PtrainerNY Wrote: ------------------------------------------------------- > It seems like the best deal now is to short the > market and wait. Almost everything seems > over-valued… > > Finding an undervalued play is getting hard… Wait until you’re insolvent? Maybe the market was undervalued 6 months ago and now it’s fairly valued. If you look at the big picture, we’re still 30% off the highs.
Yeah, if you want to short the market, it’s probably better to buy puts or wait until things actually start to drop before going short.
30% off the highs… but I see alot of 09 graduates(and some 08) who are now unemployed. Put in the '10 graduates and u have a good size of unemployed inexperienced people with their replacements lining up… Combined with all the other unemployed people it’s a mess that won’t be sorted anytime soon.
PtrainerNY Wrote: ------------------------------------------------------- > 30% off the highs… but I see alot of 09 > graduates(and some 08) who are now unemployed. Put > in the '10 graduates and u have a good size of > unemployed inexperienced people with their > replacements lining up… Combined with all the > other unemployed people it’s a mess that won’t be > sorted anytime soon. Employment is a lagging indicator. http://www.aheadofthecurve-thebook.com/11-03.html If you look at the trend, it’s becoming less worse each month and that’s what market participants look at.
It’s a lagging indicator, but it can lag for a long time, and if it doesn’t turn up, it’s hard to see how the other indicators are going to keep going up.
I would look more at continuing claims and the trend of initial claims than the fact the number is still negative. If the trend line continues we are only about 4 months from payroll growth and the growth will be pretty fast if rates are low, weak dollar etc.