Bond Math Class

Last week, I mentioned that retail investors have been seduced by a can’t-lose investing strategy that might stop working (and fail spectacularly) right at the worst possible time.
You might have heard that there were three dissents at the FOMC meeting yesterday – a rare occurrence indeed.
We’re getting closer to a genuine tightening of monetary policy – and with every passing day we’re also getting closer to the point where the ‘easy’ trade suddenly becomes hard. (For a counter-intuitive but ultimately more sensible trade, check out the current issue of Street Freak.)
Hold that thought…
Bond Math Class
I’ve taken bond math classes out the wazoo. The best of them was in the summer of 2001 at Lehman Brothers. Lehman Brothers wasn’t going to teach a bad bond math class, not at the firm that became synonymous with bond trading itself. I was ready to start whipping ‘em around. Pity I ended up in stocks.
Now, the tables have been turned, and I am the old, wizened professor, dropping some knowledge on the younger generation. I occasionally teach finance to MBA students, and there are a couple of chapters on bonds where the students have to get their calculators out.

This post was published at Mauldin Economics on SEPTEMBER 22, 2016.