This one’s a collectableMay 15, 2020 Tim WorstallRagging on Ritchie2 CommentsThe Sage thinks past coupons explain current yields. previousNicely done, nicely donenextYou’d think people might understand this 2 thoughts on “This one’s a collectable” Matt May 15, 2020 at 11:53 am He can talk out of all three sides of his face at once? dcardno May 15, 2020 at 7:13 pm In fairness, I don’t think the Spud is trying to say that, although it is hard to know what he is trying to say, or why he thinks it worth saying. Not unusually for him, he uses big words that sometimes don’t mean what he thinks they mean, or what he wants them to mean. His “Effective Interest Rate” is just weighted-average coupon – and it is a trivial observation that coupon rates have declined over the past few years, as he shows in his chart. But calling it “Effective Interest Rate” to him sounds impressive – like this is something that only a true finance guru would know; but to a real finance guy that suggests that he means yield which is where he loses the plot. Of course, adjusted for risk the yields will be ± right on the yield curve (there’s a reason they call it that…). I don’t know what “with or without BoE stock” or “index-linked” mean in this case, but I suppose it affects the risk / reward profile. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.