lol how idiotic. to think that bonds work because of correlation. fixed bonds is simple math. you have fixed coupons that you receive. what changes is the price you pay for that bond. but ur coupon is fixed no matter what if u hold until it matures. the only way you’ll outperform when rates are low is if it goes lower and we have deflation, and deflation doesnt occur for a long time so to make a bet on bonds is stupid in the first place.
so when rates are low. bonds are shit in terms of returns and have a high level of risk depending on duration. the fact that this idiot thinks that correlations will hold and and expected returns will hold just cuz marker tanks is utterly why people have ocmplained about why people misuse correlation.
equities on the other hand is just somewhat different from a bond in that the coupons are not fixed and can changes depending on the performance of the business. i guess you can say its like a floating bond, cept a floating bond is pegged to overall cahnging rates that typically just follows overall inflation.
i recall you posted a super nice article that buffett wrote in the 1980s that broke it down this way. that was an awesome read.
this one just sounds like he data mined for a portfolio that will beat an index. this one feels like he cherry picked the damn drawdowns. im sure it’ll change dependoing on the next 30 years of spy data.