Friday, September 24, 2010

Shorting Bonds Will Be 'Trade of the Decade'

Long time EPJ readers know I have no problem with the bond market view of Doug Kass when he says that shorting bonds will be the trade of the decade. As I have said before, you will be able to make a career for yourself (and a fortune) by shorting bonds.

 "I personally believe that the trade of the decade will be to short bonds," said Doug Kass, general partner in Seabreeze Partners in Palm Beach, Fla. "I know it's a variant (position)," on CNBC.

"To me the fund flows into fixed income—$500 billion in the last two years—is eerily reminiscent of the movement into domestic stock equities in '99 and 2000, and we know the outcome" of that, he said.


  1. I occasionally get the idea to short a stock, commodity, or class of investment like bonds. Generally, though, I don't know how you go about shorting something like bonds. Plus, I know it is incredibly risky, if you aren't savvy.

    Are there resources that explain short selling, especially for investments other than stock?

    Hard to know if I'll get up the nerve anytime soon, but this is something I've been curious about.

  2. How can you short bonds? Is there newbie site that can direct me to the ins and outs of shorting bonds? Maybe some older posts would help...

    Thanks for all your great work!

  3. I searched "short bond ETF" in google and found a couple "multiple" T bond short ETFs (supposed to go up if bonds go down and visa-versa at twice or 3X the amplitude). It looks like it is merely a promise to pay from the sponsor (one is Deutschebank) based on a mathematical calucation of the bond price. Anyone know if these are a legit way to short bonds?