by Travis Johnson, Stock Gumshoe | April 19, 2009 3:27 pm
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Source URL: https://www.stockgumshoe.com/2009/04/april-idea-of-the-month-not-positive-well-see-inflation-think-bonds/
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Travis,
As always, this was a good piece of work.
You may remember me, a retired farmer.
So, I’ve been playing the inflation prospect this way with bonds: buying CAT and JD debt in the near term, never going out more than a few years. These yield in the 4 – 8% range, depending, and I think they are safe. Here’s why: these are notes on machinery. By the last year or so, the debt on the machines is likely to be less than auction value of that machine.
Worst case, I guess I wouldn’t mind owning the machines.
BUT, by staying in the near term, and building a bond ladder, you end up going with the market, up , down, whatever it may be.
In the meantime, my strategy is to live within the yield I receive (AKA LIVING WITHIN YOUR BEANS) in high yield times, I spend a little more, and vises in the verses.
John M
looks solid and certainly is timely