Wednesday, December 3, 2008

Search of the Day: paul van eden short bonds

I just checked my stat sites, site stats, whatever and a few minutes ago someone from Finland arrived at Trend & Value via this google search:

paul van eden short bonds

I'm like ah fuck this dipshit still at it? of course I don't get many hits from people searching for him cus the post in which I mentioned him back in August I purposefully and repeatedly misspelled his name. (click here to read that post. it's one of my better ones actually.) so I've gotten a few people that searched for him that misspelled his name, but that's about it.

anyway (pronounced with a sigh), the first hit on that search was this article:

Sell bonds, sell gold: Paul van Eeden (10/7/2008)

it's from this site called Stockhouse.com whose mission statement is 'To help our community gain stock market advantage by engaging each other to create, share and filter high value user generated content.' so it's like a church or something. but I suppose the trust funds are raped and not the children themselves.

anyway (with a sigh that extends slightly longer) the contents of the article on Eden [sic] are pretty savory. couple choice morsels here for you:

Van Eeden is nothing if not clear and rigorous in his thinking and in his presentation. He spent time ensuring that listeners understood not only the proper monetary definition of inflation (expansion of the money supply), but also of deflation (contraction of the money supply), something that has not been pointed out with enough clarity lately.

inflation deflation yadi yada and then this:

Armed with this inflation thesis, van Eeden gave investors a piece of actionable investment advice: short bonds. His reasoning is fairly straightforward. Because of the inflationary policy now in place and accelerating, interest rates will have to rise at the other end of this crisis in order to combat the effects of inflation (rising prices across the board). And when interest rates rise, bond prices fall – particularly at the long-duration end of the spectrum; long-dated bonds are more sensitive to interest rate moves.

Therefore, sell bonds, wait for interest rates to rise and to push bond prices lower, and then buy back at the lower price and profit from the difference.


--- Clear And Rigorous! Armed With A Thesis! Actionable Advice!

I got some actionable advice fur yas: turn off yer television. stop going to these investment conferences (take the wife on a trip to nice instead, or on a nice trip at least). and as Nassim Taleb says, never take advice from someone in a suit and tie. (I only wear them when out on the town and I don't speak Spanish well enough to be giving advice to anyone around here.)