Hedge fund titan says he's rather hold hot coal than bonds
A big line of thought in markets is that bonds are about to get beaten up.
One reason it's so hard to believe is that bonds have always -- always -- been ahead of the stock market. Could this time be different? Maybe. For one, central banks have really impacted the bond market so maybe the selling is already done but price discovery is flawed.
In any case, a note from legendary investor Paul Tudor Jones is doing the rounds and in it he talks about how the bond market is going to struggle.
"If I had a choice between holding a US Treasury bond or a hot burning coal in my hand, I would choose the coal. At least that way I would only lose my hand," Jones wrote.
In the same note, he warned about owning stocks.
"People often ask where to buy the stock market. The correct answer is when real 10-year rates get back to the long term average of 3.5% and fiscal deficits are back under 2% of GDP. And that day will come. Throughout history, markets have their own way of imposing fiscal and monetary discipline and this time won't be different. At such point, the stock market will most likely be trading at or below the post-war average of cyclically-adjusted price-earnings multiple (P/E) of 20, rather than the current 33.6 times."
More here.
